This paper attempts to investigate the decline of Chinese guilds in the early 1950s and to show how political change altered economic life in China. Although the socialist transformation of private ownership started in 1954, the new government used state power to gradually weaken private ownership far before that time, building a foundation for the full-scale socialist transformation later. The reorganization of the Teahouse Guild in Chengdu reflected the general policies of the Communist Party that changed traditional social and economic organizations. The new guild almost became a representative of the government in the teahouse profession, which no longer maintained the nature of the traditional guilds. Actually, the guilds existed in name only after the reorganization of the early 1950s, and the teahouse guild disappeared after 1953. The death of the guild was a result of decline among social organizations and the growing strength of state power.