It is widely acknowledged that China is much wealthier than ever before. However, many have witnessed rising cases of moral disorders and the inefficiency of school-based moral education. As one of the most widely known theoretical frameworks in the social sciences, Bronfenbrenner's bio-ecological systems theory of human development can provide an insightful perspective in identifying the root causes of the problem. Based on the theory, this article argues that the longstanding trend of: (1) overstressing school-based values education and moral agency; (2) neglecting the impact of contextual factors; and (3) ignoring the significance of proximal processes that mediate the individual and contexts, have been leading to the unsuccessful problem-solving efforts in China. Moral education in China, therefore, should stress the contextual factors at all levels, promote proximal processes and finally establish moral ecology systems where individuals could flourish morally.