This article analyzes Nanxun, a lower Yangzi delta town known for its silk products, as a case study of China’s development and underdevelopment. In the late nineteenth and early twentieth centuries, a booming silk trade linked Nanxun to the global market and made it an extraordinarily wealthy town, yet little was achieved in terms of urban development. Scholars have attributed the underdevelopment of Nanxun to economic factors, and perceived it as entirely undesirable. This article argues that a largely overlooked cause of Nanxun’s underdevelopment was the conformist culture of Nanxun’s ruling elite. The merchants who created the wealth of the town by their very natures preferred to create a safe and secluded zone in which the familiarity of their living environment could be preserved and the comfort of a traditional lifestyle assured. The underdevelopment of Nanxun turned out, however, not to be completely negative. The town did not sustain its status as a trading center, nor develop into a major city, but its arrested development preserved much of its original layout and, moreover, its culture. From a cultural and environmental point of view, Nanxun’s underdevelopment may have proved to be more valuable than if the town had become an indistinguishable industrial site.