The article sheds light on the emergence of social innovation as a critical tool in China’s efforts to tackle social problems and meet the needs of its most vulnerable citizens. In parallel with the successes of China’s economic reform and development in the past three decades, complex challenges such as an increasing social divide and environmental degradation have arisen. This highlights the need for the country to address social inequality while maintaining social stability. Consequently, the article also argues that the government, corporations, and social organizations alike are key players in advancing social innovation. By encouraging and guiding socially minded innovative behaviors, policymakers can foster a better society and improve the quality of governance overall. Futhermore, the article also contends that social organizations—nonprofit organizations, social enterprises, and other entities engaged in doing work for the social good—are thus increasingly able to effect change in areas ranging from economic development to environmental regulation.