The critical reception of Anglo-American literary modernism in the 20th Century China can be divided into three stages: 1920s-1940s, 1950s-1960s, and 1980s-1990s, and there emerged two major paradigms: the psychological one and the political one. The first paradigm, which originated in the 1920s and 1930s,became a significant undercurrent in the studies of Anglo-American literary modernism. It was characterized by making critical comments on the modernist writers (especially novelists) from a psychological or subconscious perspective, with theoretic framework constructed on the theory of psycho-analysis or the stream-of-consciousness. It was shaped under the influence of the prevailing modern Anglo-American literary thoughts and some Japanese scholarship that had just been introduced to China. The year of 1949 was a turning point when the political paradigm began to take shape. During the 17 years between 1949 and 1966 before the ″Cultural Revolution″, the Chinese intelligentsia, by adopting the critical principle that ″the political criterion precedes the artistic one″, defined Western modernism, including Anglo-American literary modernism, as belonging to a bourgeois ideology which was opposed to Marxist ideology. When it was regarded as bourgeois literature in enemy countries during the Cold War, the ″modernist school″ was therefore condemned as ″reactionary″, ″corrupt″, ″decadent″, and ″dying″. Yuan Kejia and Wang Zuoliang, who published quite a few politically-oriented critical essays, became the two typical representatives and most significant practitioners. The political criticism was officially accepted as the only scholarly approach, and consequently the first paradigm shift took place. It was a result of not only ″a synchronic transplantation of the political discourse″ from the Russian academics, but also an inheritance of the leftist and ultra-leftist literary ideas in the 1920s and 1930s. After the ten-year interregnum which had taken place during the ″Cultural Revolution″ (19661976), the 1980s witnessed a great debate on Western modernism including Anglo-American modernism. It can be interpreted as an open and sharp confrontation between the two critical approaches in a new political and cultural milieu, which betokened the second paradigm shift in the 1990s when the psychological criticism began to replace the political one as both dominant and widely accepted. The significant change, characterized by a ″modification of discourse″ and a re-evaluation, was not only a product of ″the transplantation of outside discourse″, but also a partial awakening or reconfirmation of the previous psychological criticism. As far as the two paradigm shifts are concerned, the ″synchronic transplantation of a discourse system″, and the ″historical inheritance of a discourse system″, that is, the continuity of the scholarly tradition or academic inheritance, had obviously played an equally important role in the shift of discourse. The critical studies of Anglo-American modernist literature in the 20th Century in China left behind a complex trajectory with regard to the constant change that took place in terms of concepts and notions concerning literature, literary history and literature studies. From the perspective of paradigm shift, the paper makes a detailed and innovative description of the reception history of Anglo-American literary modernism in China, which is not without significance or benefit to our re-understanding and reevaluation of ″modernism″ as a worldwide literary movement.