Media in China are making a transition from state and party propaganda institutions to state-owned quasi-information enterprises, a process that also characterizes the country's media reform. In China's unique political and economic environment, media system reform has experienced a gradual process. Institutional innovation in Chinese media that follows the rule of maximization of profits typically spreads from economic centers such as Beijing, Shanghai, and Guangdong to inland areas. Operating by the principle of cost minimization, media institutional innovation first takes place in financial system, leading to changes in editorial policy and ultimately to macro-control system. Thus, the trajectory of the media reform moves from bottom to top. Mangers of media initiate innovations in the interest of instant benefits, party and administrative departments are protecting their own self-interest while leaving limited space for media innovation. The basic approach in media reform has been a succession of marginal adjustment. In the closed competition environment, individual media organizations stride only for a brush ahead of their competitors. At the same time, the progression of payment compels institutional change to follow the pre-ordained paths. Media reform in China is limited, but irreversible. The impact from foreign media may be a catalyst for further advancement in China's media reform.