By focusing on Guangzhou's street‐vending policy transformation, this article explores how exclusionary practices of urban politics in China are undermined by those who it seeks to exclude and the progressive political climate that questions the exclusionary framework. The exclusion of street vendors in Guangzhou has been led by the National Sanitary City campaign as a revanchist project. It has been discovered that while the exclusionary strategies are rendered difficult to operate due to the resistance of street vendors who develop a flexible, individualized and small‐scale activism to maintain their livelihoods, the discourse of social harmony at national level has driven local authorities to seek alternatives expected to alleviate social resistance and address people's livelihoods. However, rather than an overturn of the punitive framework, an ambivalent approach, recognized in a recent critique of revanchism, has been adopted to mediate the tension between the needs to retain attractive city images and address the livelihoods of the poor in Chinese cities.