It is true that new institutional economics achieved breakthroughs in the research on property rights, contracts, and transaction costs. Nevertheless, it has manifested limitations in defining the range of transactions, measuring transaction costs, anatomizing the government behavior, and determining the contents of institutional studies. These limitations have in return hampered its application to real-world issues. Over the four decades of reform and opening-up, China has accumulated a large number of valuable cases in institutional evolution, of which Western economists who engage in institutional studies are totally unaware.