This book challenges the long-prevailing interpretation of China&s legal tradition as "virtue given priority over penalty," arguing that this proposition is a projection of modern Western rule-of-law discourse and fails to accurately reveal the structure of traditional Chinese legal thought. The author introduces the concept of "virtue as foundation, penalty as function"-framing "virtue" as the bedrock of ruling legitimacy, moral education, and social self-governance, while "penalty" serves as a necessary tool for upholding order. It offers a novel theoretical framework for scholars and interested readers worldwide to re-examine China&s legal heritage and its embedded governance wisdom.