There are few studies on Chinese deliberative institutions. This is quite understandable because most writings have so far focused on village or urban elections (Tianjian Shi 1999, Kevin J. O'Brien (1994), K. O'Brien and Lianjiang Li 2000, Oi and Rozelle 2000; Anne F. Thurston 1998, J. Howell 1998; Unger 2002, Baogang He & Lang Youxing 2002 and many others). While these studies contribute to the understanding of the introduction, development and meaning of electoral local democracy in China, their narrow focus on elections has handicapped inquiries into the deliberative aspects of local democracy. Democratization should not be understood merely as the spread of liberal democracy, but also as advocating participation, deliberation, franchise, scope, and authenticity (Dryzek 1996). More importantly, while elections are an essential element of democracy, democratic procedures need to be firmly anchored in the process of genuine deliberation to avoid the tyranny of majority rule. Suzanne Ogden (2002:257) notes the importance of ″deliberation in the Chinese political system as a means of reaching consensus″ and this deliberation ″could prove to be an important building block for democratization″. She argues, ″Consensus building may be limited largely to the elite, but the Chinese system is still more open to democratic resolution of conflicts through discussion than are dictatorial systems, where neither consensus building nor elections are institutionalized″. Drawing on and developing my work on deliberative institutions (Baogang He 2003) this paper focuses on deliberative processes, deliberative institutions, deliberative democratization and their contribution to local governance in China. The paper begins with an introduction which explains the background to recent experiments with deliberative institutions, followed by an explanation of the Chinese understanding of deliberation. It then discusses key deliberative institutions, outlines main features, and compares the impact of these institutions on deliberation. Problems associated with deliberative institutions and local strategies of dealing with these problems will be examined. The final section of the paper brings together democratic theory and Chinese practice, to the ultimate benefit of both. The paper draws on my extensive fieldwork and interviews in Beijing, Shanghai, Hanzhou in 2002; Ya'An and Wuhan in 2003; and Beijing, Hangzhou, Wenlin, and Jiaojiang in 2004, where I observed and participated in more than ten deliberative meetings. In the past three years I conducted more than twenty interviews with key figures at both national and local levels to find out their motivation and strategies in developing deliberative institutions. At the same time, I collected and analyzed all relevant minutes, documents and files on participatory and deliberative institutions.