Logical analyses of legislative texts show that the root cause for the huge controversy elicited by the issue of reasonable returns for China’s privately run schools lies in the fact that legislators have confused public benefit versus non– public benefit and profit making versus non–profit making, concepts that pertain, respectively, to two different legal domains—public law (jus publicum) and private law (jus privatum). The Promotion of Privately Run Schools attempted to establish a balance between legal logic and social reality by using the ambiguous expression “reasonable returns” but succeeded only in miring “reasonable returns” in an awkward scenario of being neither reasonable nor lawful in social reality and large numbers of privately run schools are obliged to play a game of “cat-and-mouse” with the government. Hence, the current practice of differentiating publicly run and privately run schools by means of the ownership system should be changed and replaced by differentiating between profit-making and non–profit-making schools according to legal standards.