Abstract: The article puts forward two core concepts, literal reference and non-literal reference. The former denotes the consistency between a word’s referent and its semantic extension. The latter, by contrast, signifies the deviation between the two. Non-literal reference is closely related to rhetorical devices such as metaphor, metonymy, reinterpretation, puns, indirect expression, and empathy. Based on these, it can be classified into different types, thereby constructing a system of reference in modern Chinese that encompasses this phenomenon. This notion exhibits a high degree of contextual dependence. Consequently, its accurate identification necessitates the integration of multilayered contextual information, encompassing contextual, situational, and cultural dimensions. It is widely used in communication, carrying unique expressive effects and fulfilling multiple discourse functions.