Far from acting defensively to preserve the social relations and red ideologies that originally gave it power, the Chinese Communist Party is leading a social and economic transformation that could be expected to lead to direct challenges to its authority. The surprising degree of change in the Chinese socio-economic transformation and the fact that this transformation has been going on for forty years now and has not yet resulted in fundamental challenges subverting its rule have inspired my study. The overarching theoretical enquiry in my book resonates with one of the most important theoretical questions in political sociology: how does the state maintain compliance from the governed in periods of rapid social and economic transformation, and how does the logic of its governmentality change along with its priorities? My work is built on the Weberian and Gramscian tradition of understanding state rule and highlights the individual’s rationale of “believing” and “consent”, but also takes account of the Foucaudian “governmentality” the state uses to maintain its rule and investigates the underlined rationality. Empirically, I take advantage of the pension changes among China’s social welfare reforms, decipher a two-way story of statecraft in authoritarian regimes and explore whether there may be room for cognitional counter-conduct from the public. My work demonstrates that the Chinese state works through benefit allocation, propaganda, experimentation with policy and many other approaches, in order to shape public expectations and justify its rule. However, the state’s well-designed statecraft needs to enable individuals to make sense of their experience and must resonate with their “common sense”. Individuals can update their knowledge from personal interest, information from government policies, signals from current society (their peers) to decide whether to stay loyal or choose non-compliance. In a situation when active counter-conduct such as resistance is not possible, individuals may choose cognitional rebellion and falsify their public compliance.