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How do authoritarian states harness conspiracy theory as statecraft? Previous studies mainly focus the role of the state as gatekeeper or promoter and pay insufficient attention to the public’s agency. This research explores China’s diversified strategies to manage conspiracy theories on social media. By analyzing 46,387 Weibo posts through social network analysis, topic modeling, and three case studies, the study examines the government’s approaches to propagation, tolerance, and (partial) rebuttal of conspiracy theories and their consequences. The research indicates that while the state could employ conspiracy theories to mobilize the public, this approach confronts audience costs. Public discourse tends to inadvertently widen, leading to spillover and backlash effects that can undermine state interests and limit its policy flexibility. This research contributes by shedding light on the complex tactics and limitations faced by authoritarian regimes in leveraging conspiracy theories, revealing an intricate interplay between state control and public agency.