This article traces the effects of two families on the urban development of Pan- ch'iao: the Lin family during the Ch'ing dynasty and the period of Japanese rule; and the Liu family during the postwar period. These two families are analyzed using Gottdiener's conception of "growth coalition competing for urban resources and interests." The two case studies demonstrate that the success or failure of a family depended upon its relationship with the state. In the case of patronage relationships, the families were endowed with managerial power by the state, through which they controlled urban resources and manipulated their spatial locations. The development of the city of Pan-ch'iao was closely related to the growth of these two families. The Lin family adopted a passive strategy of cooperation with the state, engaging in the development of frontier land, through which they became the biggest landlord in the late Ch'ing period. The close relationship between the Lin family and the state helped the city of Pan-ch'iao develop, as financial resources were made available for urban construction due to the close Lin-Ch'ing political ties. The old central district especially benefitted from the relationship between the Lins and the local bureaucracy. This pattern of political and economic partronage continued until the eve of the Japanese invasion of South China. After the Japanese occupation of the region, the Lin family was invited to participate in the Japanese economic investment in China during the Sino-Japanese War. This fact was responsible for the KMT's labelling the Lin family as "traitors." In contrast to the established position of the Lin family, the Liu clan rose to prominence in the postwar and civil war period (1945-1949). The political and economic situation was much different for the Liu family than it had been for the Lins. The KMT was not as aggressive in accumulating capital as the Japanese had been, nor were the KMT armies alien occupiers as were the Ch'ing. The Liu family could not rely on passive political patronage from the state as had the Lins. Therefore they were forced to actively seek KMT sponsorship. In the economic field the Liu family formed alliances with other families in order to compete for urban capital, and in so doing developed a new political/business center in the city. The result was the district of Chiang-tze-ts'ui, which became a twinned central district of Pan-ch'iao after the 1950s.