The internal governance system of Chinese universities is characterized by a dichotomy between academic and administrative powers, leading to a significant imbalance in rights claims. Within this structure, a small group of rights holders occupies the core, effectively articulating their claims,while peripheral stakeholders face significant barriers to expressing and exercising their rights. As China accelerates its journey towards becoming a global leader in higher education, this imbalance threatens to hinder progress and thus fails to meet the expectations of the state, society, and stakeholders. However, it is crucial to recognize that the existing organizational structure has evolved as a response to external environmental demands over centuries, reflecting a degree of rationality that has historically supported the stability of higher education in China. To address the challenges posed by this imbalance, we must optimize the principal-agent relationships and refine the power structure, drawing from principal-agent theory and structural functionalism. In summary, while acknowledging the shortcomings of the current governance system, we should also leverage its strengths to advance the modernization of Chinese universities’ governance capacity with renewed theoretical confidence and visionary boldness.