Abstract: The establishment and development of the case guidance system represent a pivotal innovation in China's judicial reform. Since the Supreme People’s Court issued the first batch of guiding cases in 2011, this system has grown into a multi-layered architecture comprising guiding cases, reference cases from higher people’s courts, Gazette cases, and various trial reference and consulting cases. Within China's judicial framework, these different types of cases have distinct functions, positions, and legal effects. However, the maturing system faces multilayered challenges including uncertainty in factual and legal determinations, statutory lag amid emerging digital disputes, inconsistent case naming that leads to mistaken citation, inconsistency in balancing competing interests in complex cases, and a lack of coordinated conflict and withdrawal mechanisms among the proliferating case sources. Coupled with widespread judicial confusion over case validity hierarchy, these flaws result in disparate similar-case rulings, erode legal predictability and damage judicial credibility. Therefore, the case guidance system requires substantive theoretical refinement and practical reforms. Targeted optimization necessitates clarifying case validity hierarchies, standardizing case naming and screening procedures, building unified conflict and withdrawal mechanisms, and integrating decentralized case resources via the People’s Court Case Database to unify judicial citation and retrieval rules. These measures are critical to enhancing judicial credibility, ensuring uniform legal application, and fulfilling the public’s expectations for justice.