The discourse of creative industries arrived in China in the early 2000s via the epistemic network of international scholars and consultants. It has since garnered enthusiastic support on the domestic policy circuit, where it is viewed as the key to making the transition from ‘Made in China’ to ‘Created in China’. This article situates China’s creative industry development in its urban context, examining the state spatial strategies of reconstituting control over cultural production by turning the formerly organic artist villages into official art districts. Drawing upon fieldwork on the visual and performing arts sectors in Beijing, we find that the local state has extended its creative control over artists by using interlocking directorates — a practice of appointing the same government officials to serve across the executive boards of multiple governing organizations in art districts. The districtification of artist villages has led to ‘artistic urbanization’, a process whereby rural villages quickly urbanize in the midst of art‐led development endorsed and monitored by the local state. Artistic urbanization is a spatial strategy by the state to reconstitute its control over cultural production and to profit from real estate development, and it has led to renewed censorship of artists and widespread property speculation.