Housing provision in a socialist country is generally characterised by the dominance of public housing, However, provision of public housing is a complicated process, which involves various social agencies, In the case of China, the simple notion of 'state provision' covers huge differences between municipally-managed and work-unit housing, The lack of understanding in the structure of public housing provision has led to unsuccessful efforts in promoting the 'commercialisation' of housing in recent years, This paper, adopting a perspective of structure of housing provision (SHP), attempts to examine the changes in public-sector housing in China and to reveal the critical role of state work-units in the SHP, Housing reform has led to some significant changes in the SHP, The transformation, however, is far from a process of commercialisation or privatisation of public housing stock, On the production side, work-units do withdraw themselves from direct involvement in housing construction, However, on the consumption side, the low incomes of state workers, due to the political economy, have forced the work-unit system to remain as an indispensable part of the SHP, The increasing role played by state work-units shows the contradiction embedded in a socialist market economy-i.e. the reproduction of labour through market mechanisms and the persistence of public ownership of production, The changes certainly have profound implications for the nation's urban development and urban spatial structure.