The concept of historic district conservation in China has its specific context under the neoliberal urbanization that embraces both market influence and authoritarian control. Moreover, it is expected to create an experience of modern consumption and to promote an awareness of traditional culture. In order to better preserve the “authenticity” of historic districts, the resident retention mode has been created as a method of advocating for conservation as it retains part of the residential land use instead of turning the whole district into a commercial zone. Thus, the retention of residents not only preserves the “authentic,” intimate community but also eliminates what Michael Herzfeld terms “spatial cleansing.” Through my research of two case studies, however, I found that although the residential land has been kept in the conservation scheme, a high level of spatial differentiation exists between the retained communities and the outsiders. The two cases from different urban scales unpack the spatial differentiation from different perspectives. One is the district level of the Pingjiang Road historic district; the other is the city level of Suzhou Old City, where the Pingjiang district is located. The research finally shows that, with the priority of modern tourism in historic conservation schemes, local citizens are “consumed” by culture consumption through spatial marginalization or isolation, which ultimately disadvantages their economic and social status.