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Urban spatial restructuring in the globalization process is contingent and non-uniform due to the multiplicity of interactions among the different actors involved. The burgeoning literature on Chinese cities suggests that local forces play an active role in many disciplines. One of the primary places to study such interaction is the foreign enclave, a residential concentration intended for foreigners (including ethnic foreigners and ethnic Chinese from overseas) that is emerging in many large Chinese cities. However, the local authorities’ role in the formation of foreign enclaves has not been systematically examined. This article considers how the local authorities interpret the development of foreign enclaves and then how they design and implement strategies for them. Using the case of Gubei New District, the first and largest cluster of foreign housing projects in Shanghai, the article argues that developing foreign …