This article argues that China's legal reform and its later endorsement of a socialist version of the rule of law is a rational response to the crisis of political legitimacy, with the aim of facilitating the economic reforms, enhancing government efficiency, curbing corruption, and maintaining social stability and one-party rule. However, since socialist China has built its legitimacy upon economic growth, the law remains one of an array of instruments in the hands of the regime. Thus, the officially endorsed rule of law with Chinese characteristics, from both a theoretical and a practical point of view, is actually a socialist rule by law, for the simple reason that the ruling party has never wanted or advocated, throughout its reforms, a rule of law. What it wants is an effective and authoritarian legal system that will meet its goals while at the same time not undermining its control of the state and society.