Drawing attention to the governing role of capital accumulation and its interaction with the state, this study examines the dynamics of the new wave of suburbanization in China, which is characterized by the development of new towns. New towns essentially function as a spatial fix in China's contemporary accumulation regime. Rather than resulting from capital switching from the primary to the secondary circuits, new towns help to collect funds for the leverage of industrial capital and thus simultaneously sustain both circuits. Meanwhile, the development of new towns is also a process of territorial development, in which municipal governments expand the space of accumulation under strengthened fiscal and land controls and develop a metropolitan structure. Underlying the specific form and dynamics, however, is the worldwide trend of capital switching from declining manufacturing industries in developed countries to the new investment frontier in developing countries.