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Climate change has intensified tensions between food security, smallholder livelihoods, and agricultural modernization in China. Although the smallholder-based agrarian structure offers some climate resilience, recent modernization agendas have fused market and capital-intensive practices with this system. Based on this evolving agrarian political economy, this study investigates how climate change reshapes agrarian production relations - specifically, how vulnerability is distributed between agrarian actors. Drawing on policy analysis and ethnographic fieldwork in a farming village in China’s Pearl River Delta, it examines climate exposure, policy interventions, and the production relations between a local “dragon-head” agribusiness and small farmers. Findings show that through sales contracts, the agribusiness gains certain control over smallholder production and offloads climate-related risks onto farmers to secure surplus value. Without the lens of distributive vulnerability, such arrangements may appear mutually beneficial, given shared climate risks. However, this study reveals how climate vulnerability is structurally and disproportionately offloaded onto the least powerful actors, deepening existing market inequalities. By tracing the mechanism through which climate politics are embedded in agrarian production relations, this research offers a critical empirical analysis of climate injustice. It contributes to debates about the hidden costs of agricultural resilience narratives within China’s agricultural modernization reform.