As an informal institutional arrangement,convention plays a very significant role in socio-economic development and state governance,especially in ancient Chinese society.Sima Qian noted the inherent relationship between "convention" and "governance",but its importance in his economic thought is often neglected in academia.This paper analyzes the two important and interrelated categories of "convention" and "governance" in Sima Qian's economic ideological system,introduces the origin and views of Sima Qian's way of governance by convention,extends it by modern economic theory,and explores its contemporary significance.It arrives at the conclusions as follows: firstly,Sima Qian's way of governance encompasses different aspects of non-intervention governance of both Taoism and Confucianism,and his "master way of following the natural law" emphasizes that "the ones in power should fulfill the wishes of the common people"; secondly,the core of governance by convention is to follow human nature of "pursuing desires and benefits" and folk custom to achieve more effective governance by observing convention in accordance with specific situations; thirdly,as Sima Qian's economic thought had strong characteristics of empiricism and simplicity and the ancient Chinese society lacked a favorable market environment,his thought had not been valued nor been adopted until the modern times; fourthly,Sima Qian's governance by convention inspires modern state governance in the following aspects: respecting and following convention and custom,emphasizing the compatibility between informal institutions (such as custom) and formal institutions,and consolidating and promoting good customs.This paper not only extends the research on Sima Qian's economic thought,but also provides valuable historical reference to the enhancement of state governance capability.