Policies of literature and art play a guiding role in the cultural governance of a socialist country. Since the Reform & Opening-up Policy was implemented four decades ago, the Central Committee of the Communist Party of China (CPC) has made dynamic changes to policies of literature and art according to different times, which creates favorable political and cultural settings for developing artistic and cultural endeavors in a socialist society. In the early days of the Reform & Opening-up Policy (1979-1990), political taboos abounded in literature and art, later restricted by direct intervention of political leaders and mandatory directives. The 2nd-generation Central Committee of the CPC, led by Mr. Deng Xiaoping, took a look at the situations and modified the policies of literature and art. Thanks to the effort, the relationship between art, literature and politics was redefined, the aesthetic attributes of literature and art were re-established including the following as the new missions of literature and art in the Reform & Opening-up: to meet the spiritual needs of the people, and enhance the ideological, cultural and moral caliber of the whole society. This major shift in policies disengaged literature and art from politics, and created a favorable political setting for the Aesthetic Rush in the 1980s and the boom, innovation in the practice of literature and art.  After 1990, socialist market economy took shape and triggered off the growth of literature and art. The new social settings led to new issues in literature and art, the core being the tension between literature and art's cultural and economic value. In a market economy, the cultural value of a work cannot be without the market, which is detrimental to academic results contributing to the wellbeing of a society and works of literature and art focusing on people's basic interests and national wills. Therefore, at the 6th Plenary Session of the 17th CPC Central Committee, the Central Committee of the CPC made a report entitled Decisions on Major Issues in Deepening Institutional Reform of Culture and Promoting Socialist Cultural Boom by the Central Committee of the CPC, according to which the guiding principle was to Promote the Major Trend and Foster Diversity. On the one hand, the cultural market would be guided and standardized by policies and regulations; on the other hand, refined works of literature and art with ethnic or local features should be encouraged, public views be guided, vulgar practices be curbed. Both were used to ensure steady growth of socialist works of literature and art in the market economy.  From 1990 to 2012, practices of literature and art, guided by the policies, enjoyed a boom while criticism, especially aesthetic criticism, began to have blurred values, neglecting ethics and lacking depth and breadth. The absence of criticism worsened the value confusion in China's works of literature and art. Since 2012, the Central Committee of the CPC, led by President Xi Jinping, offered a cultural turn in the policy-making in literature and art and stressed the aesthetic, cultural values of works and cultural stance of cultural-criticism theories. In 2014, President Xi made a speech on literature and art, in which he proposed the notion that the Chinese Spirit is the Soul of Socialist Literature and Art. In 2017's Work Report issued at the 19th National Congress of the CPC, President Xi talked emphatically about Cultural Confidence and the need to delve into the refined cultural notions in Chinese traditions. Policies of literature and art of this period of time had global visions and focused on the cultural distinctiveness of China's literature and art. There is a stress on the balance between intrinsic nature of art, literature and their relationship with market; equally there is an adherence to People First as a cardinal principle. All in all, the policies in this period are more established strategies of cultural governance and confidence, which mirrors the CPC's notion of seeking truth from facts and keeping abreast with times in the new era.