Rapid physical expansion of urban land use is widely observed in Chinese cities. Although there is a consensus that economic liberalization and decentralization of administrative responsibilities explain the urban changes, it is not clear whether or not actual economic and population growth is the only cause of urban expansion. By using a small town as a case study, this paper shows that urban expansion is a combined outcome of actual needs, planning preparations, profit-seeking, and more importantly, the approach used by local government to achieve economic ambitions. Findings show that local economic and demographic changes do contribute to land-use expansion, but a local development approach that uses urban expansion to improve the competitive edge of the locality plays a critical role. A pro-growth coalition consisting of top local government officials, state work-unit leaders, and developers, whose interests align for short-term gain in economic and political terms, guarantee the mobilization of resources for carrying out the rapid urban expansion, and a vision of the local economic success. These findings add in a new dimension that is not yet seen in the study of China’s urban expansion.