As one aspect of China's modernization, the importation of Western psychiatric ideas poses a mystery. How are such ideas integrated with traditional assumptions? The apparently wholesale adoption of Western psychiatric categories runs counter to the fact that the Chinese have been generally reluctant to define problems in highly individualized psychiatric terms. Our lack of knowledge as to how the Chinese and Western medical models interface raises questions about the cross-cultural applicability of psychiatric theory. Ironically, the very conceptual categories intended to facilitate professional discourse obscure cultural, political, and epistemological differences between Chinese and Western thought. This paper focuses on certain incongruities in psychiatric theory and practice in order to underscore many unresolved issues that still exist with respect to our cross-cultural understandings of 'mental illness'. Insofar as the trend has been towards standardizing methodology, taxonomies have been generated without a corresponding development in textured comparison. Originating from Western theoretical frameworks, comparative analyses have been otherwise devoid of culture-specific knowledge. The goal of this paper is to show that these categorical assumptions are still premature, and that examining the meaning of current 'rates of mental illness' in China specifically raises more questions than it answers. Hopefully, this discussion will stimulate a renewed interest in ethnographic methods that would uncover locally-based understandings and thereby create the basis for a more sophisticated epidemiological comparison.