Contracting of social services has been adopted in China as an innovation in welfare provision. This article reviews the emerging literature on contracting of services to social organisations in China in order to identify lines of further enquiry. It reviews research published in the English and Chinese languages up to 2018. We identify three distinct narratives: public sector reform, improvement of welfare service quality and capacity, and transformation of state-society relations. We contrast the identified narratives with the empirical evidence produced for the Chinese case. We demonstrate that, despite contradictory empirical evidence, the premise that contracting improves public sector efficiency and quality of services predominates. The narrative that contracting transforms state-society relations is contested. This article contributes to the understanding of how contracting of services is justified in theory and practice, and proposes an agenda for future social policy research on contracting of services to social organisations in China.