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It has been perceived that China has formed a triple-market of religions, namely a red market of government-sanctioned religions, a black market of government-suppressed religions, and a large gray market of folk religion and spiritual groups. Additionally, China has formed a legal system to govern religious affairs, although little attention has been paid to this. This article develops a tripartite legal theory, arguing that freedom of religion has been tripartite. This will serve to illustrate the extent to which freedom of religion is protected in Chinese law and the conditions under which freedom of religion has been restricted in an illiberal context. Specifically, it comprises three incremental layers, namely conditional freedom, limited freedom, and no freedom. It is further suggested that such a tripartite model is dynamic, resilient, and compatible with China’s authoritarianism under the leadership of the Chinese Communist Party.