Based on a comprehensive analysis of the church-state relations in the national and two local contexts (Wenzhou and Nanyang), this article summarizes the basic dynamics of church-state interactions in the Reform era of China. There are three key findings: 1) as a result of the tension between the development of Christianity and the intention of the party-state to control religion, the church-state relations fluctuate constantly; 2) many campaigns of the party-state to control Protestantism failed and also led to some unintended contribution to the continuous development of Protestantism; 3) the budget restraint of political campaign, the conflicting interests between upper level government and local governments, as well as the relative successful embedment of the churches in local society all crippled the part-state's religious regulation. This article advances our understanding on the nature of party-state and religious regulation.