Being based on the idea "Law Emerging from Li", the characteristics of Hsun Tzu's Li and Fa though reveal themselves through the concepts that Li (proper conduct of human existence) is the basis of Fa (law) and the principle of Lei (analogies). These dieas was ways of ruling the situations in which when laws are sufficient, then we rule according to laws, otherwise, then according to practices. Due to the fact that Hsun Tzu's though is based on his idea that men are born bad, this article starts from an analysis of Hsun Tzu's theory of human nature, proceeding to his thought of Li and Fa, paying special attention on the concepts such as Li, Fa, Lei, Hsin (penalty). This article holds a positive attitude towards the contemporary studies on Hsun Tzu's Li and Fa though, but a point remains to be clarified. Differing from many studies, in this article. We put forward the thesis that the relationship between the ideas "the rule of people" and "the rule of law" is not in opposition, but in order. We have evidence to believe that, according to Hsun Tzu, "the rule of people" proceeding "the rule of law" is proposed not because law is less important, but because men are equipped with the capability of judgment.