Most research into ethical leadership depends on Western corporate experience, however current research findings may not fit the Chinese context. As a result, it is necessary to appeal to indigenous and traditional Chinese sources of wisdom when defining and evaluating ethical leadership in China. Both rule-following ethics and instrumental approaches, which are mainly used in recent empirical studies about ethical leadership, cannot enable people to have inner motivation to behave ethically. Accordingly, this article intends to establish an ethical leadership model in China by appealing to Confucian virtue ethics. A Confucian ethical leader possesses benevolence (ren 仁) inside and treats others in a proper way according to ritual and rites (li 禮). He/she makes self-cultivation as the first priority and is a virtuous role model, influencing others in a natural way by of his/her moral charisma. For such a person, economic profitableness is not a primary concern, where instead the goals, strategies and practices of his/her organization are defined by the principle of righteousness (yi 義).