How and why has China managed to develop and urbanize without the slums that dominate large cities in other poor countries the world over? Why has the Chinese Communist Party persisted in power when so many other communist and autocratic regimes have fallen? I develop a general argument about redistribution, urbanization, and regime stability based on the Chinese case. Since 2002, scholars affiliated with the Chinese Communist Party have argued that the Chinese government fears ＂Latin Americanization＂ (la mei hua), that is, highly unequal megacities and their attendant crime, slums, and social instability. In response, the Chinese government has abolished agricultural taxes and begun subsidizing rural areas. This shift is anomalous since most developing countries give preferential treatment to cities in order to reduce the threat of urban unrest. I argue that such urban favoritism is self-defeating in the long-term because it induces further urbanization, increasing the long-term risk to the regime. Nevertheless, urban bias remains endemic in the developing world because most governments do not have the luxury to think beyond the short-term. I test the implications of this argument both cross-nationally and within China using quantitative and qualitative data. Cross-national survival analysis of autocratic regimes since World War II shows that urbanization, controlling for level of economic development, negatively affects regime duration. In order to study the mechanisms at work, I used 15 months of field research in Beijing and two other provinces to delve into the Chinese case. Two sets of analyses at the national and local level respectively illustrate how the government uses fiscal and other policies to maintain social stability and to control and direct urbanization.