The narrative of utopia in Chinese literature has been unable to break free from the literary tradition of the land of peach blossoms by Tao Yuanming. From Fei Ming’s Qiao (1932) to Yan Lianke’s Shouhuo (2003), there is a retrospective attribute, constructing a rural utopia with the land of peach blossoms as the basis. This paper begins by accounting for the images of the Oriental utopia with which Fei Ming’s novels are imbued, then, upon close examination of Yan Lianke’s Shouhuo, discusses the tradition of rural utopia in Chinese literature and its process towards final disillusion in the 21st century. Shouhuo is unique in both its narrative form and concept of utopia, especially in its description of the paradise created by the disabled; ‘disability’ is hence an important aspect of this utopia. Yet Shouhuo presents attributes of dystopia at the very end: it reveals the disillusion with various forms of utopia – Chinese tradition, communism, and consumerism – presenting the deep-seated historical crisis of Chinese rural society and the emptiness of contemporary cultural ideology, societal ideals and historical perspective. The discourse and historical practice of utopia forms an important thread in the cultural history of mankind, with utopia becoming an important motif in world literature. Chinese writers have unavoidably touched on this subject matter in various forms. This paper attempts to briefly trace the narrative of utopia in the history of Chinese literature, and then, focusing on Yan Lianke’s novel, Shouhuo, discusses the issue of rural utopia and its eventual disillusion in Chinese literature.