This paper examines the discursive structure of ‘soft power’ in China, its cultural, historical and political backgrounds and the role the mass media play in mediating its meanings. Conceptualised within critical discourse analysis, this study assesses soft power discourse as a form of articulating traditional values by China’s political and intellectual elites, and offers a view on China’s future direction. It also discusses how official formulations of soft power are contested, critiqued, but crucially communicated in the commercialised but diversified mass media. Specifically, it focuses on three levels of analysis: (1) a description of the language of ‘soft power’, (2) an interpretation of soft power as an institutional practice, and (3) an explanation of the broad socio-political dynamics that shape the discourse of soft power. The study argues that the Chinese notion of soft power is significantly different from Nye’s. It functions in part as an instrument for an ideological reformulation in the official discourse and reconstruction of cultural identities in the intellectual discourse. The study concludes with a critical evaluation of the significance and implications of the soft power discourse.