This article will revisit Smith’s seminal argument that gentrification is a global urban strategy. The article pays attention to the role of the state and displacement during the process of redevelopment. Through an in-depth study of a dilapidated neighborhood with concentrated migrant population in Shanghai, it is revealed that state control is behind the deterioration of the neighborhood prior to its redevelopment. Inadequate services and poor housing conditions are undeniable. Informal development has been quickly realigned by state dominance. The self-building neighborhood is eventually replaced by state-sanctioned development projects. The article echoes the debate over displacement in the West and suggests that recent urban redevelopment in China has gone beyond both the sporadic middle-class return to the city and residential changes backed up by state actions, revealing hegemonic power of the state over spatial production. Through urban redevelopment, the state attempts to regularize informal areas into new production spaces for its revenue maximization.