Since 2004 when China started the first Confucius Institute (CI) in the world, there has been hundreds of CIs established in the world till now. This study tried to provide a deep look of China's CI project and contribute a comprehensive knowledge to understand CI's functions in Scandinavia and its impact on building China's soft power in this community. In this study, two CI cases in Scandinavia were selected to make analysis by applying CI function framework and soft power theory. It was found the reasons of China to take the CI project are derived from China's need to apply soft power strategy and its internal political imperatives. The in-depth fieldwork shows the functions that CI is playing in Scandinavia have helped China to develop its soft power in this area, but the increase of China's soft power is limited. The development of China's soft power in this area is still on its primary stage. However, the impact of CI on building China's soft power here may potentially turn bigger and deeper in coming future.