Upper secondary education in mainland China (China, hereafter) has experienced a dramatic expansion during the period of 1980—2010. China is an illuminating case for analyzing the expansion of upper secondary education. This is not only because China’s upper secondary education has undergone a transformation from elite, mass, and universal form for the last thirty years amid the rapid economic development since the economic reform in 1978. Moreover, the decision making and policy implementation in China are characterized by a topdown process. These special features render China as an illuminating case for studying the development of upper secondary education in the context of changing socio-economic development, in particular, the interplay between economic development and social policy in shaping the development of upper secondary education. This study examines the expansion process of upper secondary expansion, with special focus on the interplay between (a) growing demand from labor market and public preference, and (b) the educational policies in shaping the expansion of upper secondary education. This study mainly adopts the functionalism perspective to interpret China’s expansion of upper secondary education. The dramatic industrialization and economic development drive a growing demand in labor market for skilled and educated workforce and a public preference shift for more education. In response the pressing demand and maintain a rapid economic growth, the Chinese government made serious attempt to (a) expand the system capacity of upper secondary education, and (b) promote vocational upper secondary education, which is believed to provide a skilled and educated workforce to meet the market demand. Moreover, in the post-expansion period, private schools have growing importance in the development of upper secondary education. This study also discusses the changing role of the government and market in the context of decentralization and marketization of education.