From the early 1990s onwards, the institution of punitive damages in Chinese civil law has been introduced in translation, learned in discussion, and adopted over a 20 year period of development. Punitive damages were first provided for in Article 49 of the Consumer Protection Law (CPL) of 1993, and this institution has expanded into the field of tort liability with later laws (the Food Safety Law and the Tort Law), and judicial interpretation as supplement. Further, the latest amendment of the CPL has drawn attention to the following two points: (1) the calculation method has been amended leading to an increase in punitive damage amounts in most cases; (2) Article 55 specifies the corresponding provision in the CTL. It has coordinated and synchronized two institutions: punitive damages and mental injury compensation, in the way of entitling the consumer the “right to claim punitive compensation of not more than twice the amount of losses incurred” with the “the amount of losses” including the mental injury compensation. In the second part, the very basis upon which the developing legislations above rests is rooted in intense academic discussions regarding various aspects of punitive damages. Some quintessential topics thereof selected in this article concern: the legitimacy of punitive damages, commentaries on buying-fake-while-knowing-it, the calculation method for punitive damages, and the relationship between punitive damages and mental injury compensation. In the summary, the authors reveal certain negative trends in the application of punitive damages.