This study examines how political-economic and socio-cultural influences had impacted the institutional development of HVE in China by investigating the historical development process of HVE between 1980 and 2007, when the country was undergoing tremendous political, economic, and social transitions toward building Socialism with Chinese Characteristics. With the research method of document content analysis, the study reveals causes, effects, and trends of HVE development through comparisons between HVE-related policy contents concerning major HVE institutional realities including contexts, missions, structures, access, tuition, curricula, teaching staff, graduate employment, funding and governance, and social status. Within a theoretical framework utilizing vocationalism, Confucianism, and neoinstitutionalism, analysis and discussion resulted in a number of findings. First, the development of HVE in China embodied a trend of vocationalism, which has led and is leading to higher education expansion, higher education restructuring, and a positive change of Chinese people’s views on careers. Second, in addition to its discrimination against skills/skilled workers, the mechanism of upward mobility entailed in Confucianism was another major reason causing resistance to HVE. Third, given the increasingly competitive Civil Service Examination, Chinese people’s views on careers were not synchronized to the mass higher education system that was underway in China. Fourth, while supporting HVE, vocationalism itself created problems for HVE. A new vocationalist view was needed for future HVE development. Confucianism may contribute to such a new vocationalist view drawing on humanities education and the mechanism of upward mobility, though its notion of scholar-officials was critiqued for impeding the development of HVE. Fifth, HVE students had been treated unequally in the whole process of studying in HVE from admission to participation to graduation. Sixth, from a neoinstitutionalist perspective, the development of HVE represented the process of its instutionalization, in which HVE needed to obtain legitimacy. Absence of legitimacy was the major reason causing various challenges facing the development of HVE. Seventh, the development of HVE indicated institutional isomorphic changes in Chinese higher education. Eighth, biased policy causing stratification of Chinese higher education was another major factor leading to various challenges facing HVE.