The penal system in the People's Republic of China is composed of an administrative detention system and a judicial incarceration system. As of 2020, it is estimated that 1.7 million people had been incarcerated in the People's Republic of China, which is the second-highest prison population after the United States, thus as China has approx. 4-times more inhabitants than the US, the US prison population is more than four times higher per capita than in China. China also retains the use of the death penalty with the approval of the Supreme People's Court, and there is a system of death penalty with reprieve in which the sentence is suspended unless the convict commits another major crime within two years while they are detained.

Penal labor was formalized in the 1950s, soon after the Chinese Communist Party (CCP) won the Chinese Civil War. According to historian John Delury, "Communist penal theory fused traditional Confucian and Buddhist notions of transformation with Soviet techniques."

The Prison Law of the People's Republic of China was enacted on December 20, 1994. Since then, the Chinese prison system has operated under supervision of the Bureau of Prison Administration which falls under the Ministry of Justice.

All prisons in China operate businesses which they use to fund their operations. Prison officers can earn bonuses for financial and business performance.

The prisons which were managed by the Ministry of Justice held 1,649,804 prisoners in mid-2015, resulting in a population rate of 118 per 100,000. Adding the number of detainees in the Ministry of Public Security's detention centers of 650,000 reported as of 2009, would result a total population of 2,300,000, and raise the rate to 164 per 100,000. In the same report, it is noted that female prisoners account for about 6.5%, juvenile for 0.8% and foreigners for 0.4% of the total prisoners population in Ministry of Justice's facilities.

Public security departments, People's Procuratorates, People's Courts and Supervisory Commissions can issue detention orders, and the detainees are usually held in facilities managed by public security departments, though supervisory commissions usually take care of their own detainees. State security department have similar rights and functions as public security departments.^{[citation needed]}

Delegates of the congress or local people's congress above county-level during their term are exempt from detention or criminal prosecution without prior approval from the standing committee of the corresponding legislature. Chinese police and security services routinely make use of torture to obtain confessions and information from detainees.

Public Security officers can summon civilians for investigative purposes, and can use force when a civilian refuses to cooperate and when approved by a superior officer. Public Security Administration Punishment Law states police should not question citizen on grounds authorized exceed eight hours, unless the citizen has violation that could result in administrative detention, in which case, the questioning could be extended to 24 hours. Criminal Procedure Law states the police should not question someone for more than twelve hours, unless that someone is a major suspect of a crime, in which case it could be extended to twenty four hours.