Local governments in China are resisting and distorting the rights revolution in national law, at the core of which lies the imposition of constraints on those governments’ eminent domain power. Meanwhile, facing national legislative gridlock, local governments experiment with such initiatives as granting farmers land development rights. Why are Chinese local governments simultaneously endangering the tenure security of farmers and expanding their land rights beyond what is permitted under the law? I develop a bi-dimensional framework of federalism in China and argue the framework provides a better explanation of the governments’ seemingly contradictory attitudes than the conventional view of unidimensional federalism with interjurisdictional competition at its heart. Only the combination of horizontal and vertical federalism can incentivize local governments to protect individual land rights. Competition in one dimension alone cannot credibly commit governments to protecting rights.