“Virtue given priority over penalty” is widely regarded by modern scholars as a defining characteristic of traditional Chinese jurisprudence. However, this formulation was not actually used in classical texts—it is a modern scholarly construct, first proposed by Yang Honglie in History of Chinese Legal Thought. Yang juxtaposed Confucian “ritual governance” or “virtue given priority over penalty” thought against Legalist “rule by law”, concluding that Confucianism prioritized moral education while marginalizing legal institutions. This chapter argues that “virtue given priority over penalty” inaccurately captures the essence of traditional Chinese law. Instead, “virtue as the foundation, punishment as the supplement”, a self-description found in imperial legal practice—not only more precisely encapsulates the Confucian-Legalist dynamic but also offers valuable insights for contemporary governance innovation.