China has been undergoing a rapid development over the past decades, and rural areas are facing a number of challenges in the process of the change. The "New Channel" project, initiated to promote sustainable development and protect natural and cultural heritage in Tongdao county in China from a rapid urbanization and economic development, employed an ethnographic study and a strategic design approach to explore the local context and to identify opportunities for sustainable development. In particular, Hengling village, a small village consisting of 307 households in Tongdao county, was studied by a group of design researchers for ten days. Findings from an ethnographic study and a strategy planned to promote sustainable development in Hengling village are presented. [For the complete proceedings, see ED557181.]