This dissertation studies China's first industrializing efforts to transform its navigation, cotton textiles and banking in the late nineteenth century, and analyzes the paradoxical roles of the state and culture in achieving development. It argues that successful late development is dependent on state policies that emphasize state-society connectedness and tradition-modernity continuity. In late Qing China, the state-midwifed industrial projects faced both intensive competition from foreign firms and resistance from domestic vested interests. Because key resource factors such as capital, production technology, and management skill were scarce and distributed unevenly across multiple sectors, the state officials had to redirect the resource flows in order to found new industries. The state had to perform an essential function of creative destruction, without which social groups in non-state sectors would be less likely to embrace changes, but the ultimate success of new industries depended on a societal consolidation that redefined the state-society relationship. This study also shows that culture was a double-edged sword with great potential for lubricating industrial transformation. The promoters of development created myths, symbols and beliefs to legitimize their industrializing efforts. They made a constant effort to reinterpret tradition in order to find compatibility between the foreign and domestic systems. The distinctive sectoral paths taken by navigation, cotton textiles and banking represented different patterns of state-society cooperation for achieving development. Each sector had distinct production technologies and product structure, and was endowed with distinct sectoral institutions and other legacies. These endowments constrained choices of every new industry, but it was a combination of structural factors and industry's responsive strategies that explained why some enterprises succeeded while others failed. A project was more likely to succeed if there was greater state-society connectedness and cultural compatibility. Steam navigation was the most successful among the three, followed by cotton textiles. Banking was the least successful.