Abstract: In the process of law modernization, China is carrying out the construction led by govern ment. In that case, whether the basis of folk law still exists or not, and how can we look on it? Through an analysis of an case, this paper holds that folk law is not only acknowleged by many scholars, but also has its legitimacy. The formation of statesociety dual structure offers social conditions, the barrier of formal tradition and small tradition offers the cultural soil. In dealing with the relationship between them, we cant squeeze and eradicate the small tradition, whereas, We should have a rational dialogue and adjustment for them on the basis of mutual respect.