The boom in tourism to and within China is quite a recent phenomenon. China is now among the leading international tourist destinations, and demand for domestic tourism is rapidly increasing. This study examines the role of tourism in the local economic development in different areas of China, and identifies the decisive factors in determining the success or failure of tourism-oriented development strategy at the local level. The author juxtaposes case studies of Guilin, a domestic and international tourist destination in a less developed local area, Suzhou, also both a domestic and international destination but in a more mature local economy, and lastly Beidaihe, a mainly domestic tourist destination.