This paper analyses institutional reforms and political participation, most notably indirect and direct elections of residential committees (RC), in China's urban neighbourhoods and communities (shequ). It shows that these elections at present are not meaningful to the majority of city dwellers as the RCs have little decision-making power and no revenues generated by a collective economy as in most of China's villages. RCs are primarily important to those weaker strata of society who depend on the state to be provided with social services and financial support - tasks that the RCs are forced to assume on behalf of higher government authorities. Nevertheless, the author finds that as limited the significance of - and knowledge about - RC elections in the daily lives of China's urban dwellers still are, they still have some influence on political awareness and participation. For instance, they make people voice more opinions in their shequ, which may be a good starting point for more direct interference in local political affairs soon to come. The paper emphasizes that RC elections have been introduced in order to enhance regime legitimacy but suggests that they may spur democratization by the rise of accountability as a conditioning factor of this legitimacy and by electoral 'habituation' as a transition to full democratic commitment. Whilst 'security first, participation second' seems to be the order of the day and the 'freedom of politics' is still more important than a concern for RC elections and shequ affairs, it remains to be seen if those elections may not soon trigger off a meaningful drive for political participation in China's cities.