In response to worsening social instability in China, among grassroots communities in the poorer central and western provinces in particular, the Chinese central government has made budgetary arrangements, since 2003, to increase investment at the grassroots level to improve the capacity of local governments to maintain social order. However, this action by central government has created a dilemma for local cadres: how to perform their duty to maintain social stability while also balancing a heavy fiscal burden caused in part by the receipt of insufficient additional budgetary subsidies from higher government. This paper is an account of and an analysis of how local cadres in China perform their official duties when faced with this dilemma.