The form of Confucius` thinking is such that it integrates the positive values of two opposing poles onto a higher level of harmonious value. In practice, he advocates the orderly and gradual process of maintaining the mean, after considering both sides of the matter. Based on moral consciousness, it is the middle way which begins with the small to the large, positively encompassing in order to achieve the highest goal. Lao-tzu`s method is to emulate the way of heaven and furthermore, to return to the root of nature－Tao, expressed in paradoxes of affirming the negative to reveal the positive. It emphasizes the `how` of `not-doing-nothing`, namely, achieving profound virtue by being `non-virtuous`, achieving great benevolence by being `non-benevolent`, achieving great righteousness by `forsaking righteousness`, achieving great propriety by `despising propriety`, and achieving great wisdom by `forsaking wisdom`. In this regard, Lao-tzu`s teaching can be utilized to remove the defects of the fossilized Chou culture. It can also be said to have facilitated the Confucianists` effort to realize their absolute values. The outline of this paper is as follows:1. PREFACE2. THE PHILOSOPHICAL METHOD OF CONFUCIUS(1) Value Distinctions and Integration(2) The Goal and Process of Moral Practice(3) The Principles and Steps of Political Government(4) The Fundamental Form of Thinking3. THE PHILOSOPHICAL METHOD OF LAO-TZU(1)Value Distinctions: Classes and Relations(2)Tao as Metaphysics(3)Tao as Practicality(4)Paradoxical Forms of Expression4. REFLECTIONS ON THE PHILOSOPHICAL METHODS OF PRE-CH`IN CONFUCIANISM AND TAOISM