Since Communist China came to power, it has upheld Marxist-Leninist Communism as its top guiding policy and wrecked havoc on Chinese traditional culture, most especially during China’s Cultural Revolution, when “Confucius-bashing” aimed to totally eradicate Confucian philosophy and values. Today, China has turned around to keenly promote Chinese language and cultural studies internationally by establishing “Confucius Institutes” extensively in many countries. Since the inception of the first Confucius Institute in Seoul, Korea on November 21, 2004, and up till March 2008, China has already set up 238 such institutes. Set up through China’s cooperation with local organizations, these non-profit educational institutes were mostly initiated, and agreements signed, during state visits by foreign leaders to China; or during top Chinese officials’ visits to other countries, for ground-breaking or opening ceremonies of these institutes. It is worthwhile to study and analyze what China’s objectives and motivation are behind its high-profile establishment of Confucius Institutes overseas. Rapid advancement in transportation and communication technologies has allowed ever more frequent cross-cultural engagement and communication among countries by different people on various issues and topics. This is the so-called “Intercultural Communication” in journalistic terminology. If viewed from this perspective, the establishment of Confucius Institutes for promoting Chinese language studies and Chinese culture is actually an attempt for engagement in cross-cultural communication. This study uses relevant theories as basis and analytical rationalization to clarify terminologies and principles regarding intercultural communication as these relate to the reasons for China’s establishment of Confucius Institutes overseas; then use the current status and progress of these institutes as evidence and explanation; and finally, analyze China’s objective and anticipated results for establishing Confucius Institutes as a conclusion.