Chinese state firms are expected not only to profit but also to serve state interests. But the Chinese state is fragmented: border provinces are taking on an expanded role in China's global expansion and a broad range of firm activities could be defined as patriotic contributions. Through the case of Yunnan State Farms (YSF), a province-level state-owned enterprise, this article explores how state firms interpret and navigate multiple state interests while also pursuing profit. The firm's ability to profit depends on balancing the demands and support of different Chinese state actors while depicting itself as a development partner to the Lao state and a contributor to Sino-Lao diplomatic relations and border region stability. This case thus shows that, instead of YSF's behaviour being directed by the state, the firm exercises considerable latitude in defining its contributions to state interests through the expansion of rubber production as a driver of development.

How do subnational agents exercise policy discretion in the social welfare sphere? To what extent do they do so as a result of various bureaucratic and fiscal incentives? The literature has documented several explanatory frameworks in the context of China that predominantly focus on the realm of developmental policies. Owing to the salient characteristics of the social policy arena, local adaptation of centrally designed policies may operate on distinctive logics. This study synthesizes the recent scholarship on subnational social policymaking and explains the significant interregional disparities in China's de facto urban poverty line – the eligibility standard of the urban minimum livelihood guarantee scheme, or dibao. Five research hypotheses are formulated for empirical examination: fiscal power effect, population effect, fiscal dependency effect, province effect and neighbour effect. Quantitative analysis of provincial-level panel data largely endorses the hypotheses. The remarkable subnational variations in dibao standards are explained by a salient constellation of fiscal and political factors that are embedded within the country's complex intergovernmental relations and fiscal arrangements. Both a race-to-the-top and a race-to-the-bottom may be fostered by distinctive mechanisms. The unique role of provincial governments as intermediary agents within China's political apparatus is illuminated in the social policy arena.