Theory can be divided into `that which is to be managed` and `that which manages`. The former is a first-order theory and the latter is second-order theory. The so-called insufficiency of theory refers to second-order theory. This paper uses the Hsun-tzu as an example of the insufficiency of theory in Chinese thought and its consequences.1. The insufficiency of theory in Chinese thought is possibly universal. The style of Chinese philosophical work manifests this point. They are mostly literary texts, and not written in an academic style. The key concepts are seldom expressed in any theoretical framework, e. g. the concepts of tao, jen, hsin, hsing, li, ch`i, etc.2.1 The first direct consequence of the insufficiency of theory are laxity, crudeness of thought and chaos, the inability to enter a fine and complete realm.2.2 The second direct consequence is the inability of the author to understand himself, and also, the inability of the reader to understand him.2.3 Thirdly, the misunderstanding of the reader.3.1 The first indirect consequence is an unhealthy academic research model.3.2 The second indirect consequence is the difficulty of manifesting an academic standard. I think that the work of second-order theory will become the work of Chinese academic philosophical thought from now on. This is a natural situation, because in anything, there is a progression from crudity toward refinement. No doubt this is difficult and even painful. Moreover, I think, when this work has reached a certain level of accomplishment, we will all cross over the ancestral product and make progress. This is because in the midst of chaos, man has no way forward. At that time, it is possible that we shall have new thinkers.