Lacan studied ancient Chinese classics assiduously, including Daodejing and Mencius during 1969-73 when his own thought was reaching maturity. Lacan's idiosyncratic interpretation of Mencius is often regarded as a simple misreading. This essay defends Lacan's reading of Mencius by treating it as a psychoanalytic reading. It further develops a reinterpretation of ancient Chinese thought by revisiting primarily two major disputes - Mencius versus Xunzi, Confucianism versus Daoism - through a Lacanian interpretative method. The research findings reveal the possible latent side of ancient Chinese thought that has substantially formed what Lacan called ‘the Chinese unconscious’.