The study deals with the academic profession in China. Its characteristics and relationship with changing social institutions are explored by a historical approach and from an institutional perspective, which includes two elements of government and organization. The major findings of this study are summarized below. First, in accordance with China’s legal framework, public and private higher education institutions are categorized as different legal entities, a difference that leads to favourable conditions for the academic profession in the public sector and to less favourable conditions in the private sector, and which also obstructs personnel flow and competition between the two sectors. Second, the personnel system has changed significantly since 1978, when it was reformed and the policies became more open. This change is largely led by the central government. As regards faculty hiring and promotion, qualification and performance are emphasized over seniority. As regards remuneration and benefits, the egalitarian approach has gradually been replaced by income gains based on performance. Finally, evidence shows that China’s higher education institutions has evolved from so-called danwei governed under a planned system to organizations ruled by the market system, which has caused the academic profession to evolve from a danwei profession into a more organizational one.