After more than two decades of painstaking legislation process, on 1^st of May, 2013, the Mental Health Law was finally administrated in China. The adoption of such law at the state level is hoped not only to adjust the potential political abuse of psychiatry, but also to popularise community mental health services, regulate professional and disciplinary functions of psychiatric science, and provide legal grounds for appropriate psychiatric treatments. Such move not only responded psychiatrists’ call for a sturdy mental health system but also professed China’s aspiration to benchmark the universal values of human rights and medical ethics. Right before the administration of Mental Health Law, however, a neologistic catchphrase bei jingshenbing (被精神病), which refers to the experience of being misidentified as having symptoms of mental illness resulting in mental hospital admission either for humanitarian or malice intention, suddenly became a buzzword in the media either online or in press. Using historical accounts obtained from the Beijing Municipal Archives, historical and contemporary Chinese medical periodicals and oral interviews collected during my fieldwork in multiple sites with clinical psychiatrists, public defenders, human right activists and individuals who had experiences of bei jingshenbing, this paper attempts to draw an overall picture of the misappropriation of psychiatry in 20^th Century China from social, cultural, economic, legal and medical perspectives, arguing that the rapid spread of “bei-jingshenbing” in contemporary Chinese society has not only reflected the fear among Chinese people of the punitive nature of psychiatry abut also their growing credence in scientific health governing during the years of social change. It further reveals the disjunctive acceleration of medical modernity in China concerning the struggle between adopting the international classification of mental disorders and “manufacturing” culturally-sensitive disease categories catering to local needs. Finally, this paper examines various scholarly and media discussions about “bei-jingshenbing” in the context of China’s rapid capitalization, the pursuit of equity and justice among disfranchised citizens and the challenge faced by policy makers regarding mental health reform.