In the 1980s and 1990s, China experienced rapid labour transfer from agricultural to non-agricultural activities. Large numbers of Chinese villagers sought to escape low-status and unprofitable work in grain cultivation through migration or local off-farm employment. Although migrants generally earned higher wage income, they suffered from inferior work and living conditions compared to local off-farm workers. All things considered, we argue that migration was a second best option for the villagers which they chose only after they had failed to secure comparable local employment. Under such circumstances, political power in the rural area was expected to have a significant influence on the outcome of local off-farm employment. When the off-farm population (migrants and local off-farm workers) is further divided into wage labourers and entrepreneurs, it can be seen that local power worked differently in each case. Being from a cadre family had little impact on whether a wage worker stayed local or migrated, but entrepreneurs with political connections were more likely to stay in the local area. This conclusion contradicts the “market transition” theory that asserts marketization (measured by the presence of private entrepreneurial activities) nullifies the advantage of traditional power. It also qualifies the “power persistence” theory in that positional power seemed less relevant for the wage labourers than for the private entrepreneurs.