In China there has been a strong trend to diversification and decentralization of higher education in the post-Mao period. This paper examines how the policy of decentralization has affected the governance of universities in Guangdong. More specifically, the paper focuses on reform of the financing and management structure, the merging of universities, and joint development programmes to enhance competitiveness. Despite these changes, the state's role as a regulator and overall service coordinator has been strengthened rather than weakened under the policy of decentralization. This paper not only examines the recent developments in Guangdong's higher education but also analyses such developments in light of the global trend towards decentralization in educational governance.