Globalization stimulates local governments in China and the United States to step up their economic development efforts. What strategies are successful and why? Does industry cluster development lead to higher per capita income? What government infrastructure and incentives stimulate and nurture businesses? This article examines local economic development in China and the United States, comparing strategies and outlining challenging issues. Kuotsai Tom Liou of the University of Central Florida finds that local governments must play the leading role in sustainable development, as a partnership approach promotes collaboration among communities, industries, and other government entities. Policy implications and theoretical issues aimed to promote further comparative studies are presented.