This paper presents perceptions of China's Confucius Institute project held by different stakeholders in China and the USA. A number of studies have been published in each place since the first establishment of Confucius Institutes in 2004, but there has not been a comparative study to date. The study, which draws on media reports related to significant milestones in the development of Confucius Institutes, shows that, in the USA, the institutes are viewed with a considerable degree of ambivalence. They are attractive for universities seeking engagement with China, but also seen as a threat to academic freedom. Domestically, Confucius Institutes are perceived as a way to soften China's international image and to promote the Chinese language and culture, although some concerns have been raised about the cost and transparency of the initiative. The paper highlights the controversial aspects of the institutes and outlines some of the challenges facing China in making the strategy effective.