Abstract: With the rapid development of China’s economy and urbanization, the rural governance is shifting dramatically from the traditional type based on clan and kinship to the market and legal system. The relationship between society and government should be well handled to guarantee the complementarity between the traditional mechanisms and market and legal system during the transition. We find that the traditional mechanisms are still playing a role in contemporary rural China. Meanwhile, the drawbacks of the traditional mechanisms are gradually weakening, while their benefits still hold during marketization and urbanization. The economic development process itself will automatically mitigate the negative side of the traditional mechanisms, while their positive effects are still working. The government needs to take advantage of the benefits of the traditional social capital, interact and cooperate well with it. It’s not necessary to rush to replace the traditional social capital, but to be alert to the abuse of government power.