With China's open-door policy, entry into WTO, the Beijing 2008 Olympic Games, Shanghai World Expo 2010 and the globalization, more and more Chinese people are learning English and large numbers of people around the world are visiting and getting to know more about Chinese culture. During the process, an English variety, China English, appears. There is heated discussion about this variety among many scholars. Some approve the positive effect and the feasibility of China English, while others adopt a suspicious and disapproving attitude towards it. This dissertation aims to provide some theoretic analysis and evidence to support the positive effect of China English in terms of vocabulary in intercultural communication. The dissertation firstly introduces the concept and the history of China English and then makes a comparison between the easily confused terms of"Chinglish"and"China English". In the second part, it gives a clear picture of the current argument over the variety in the aspects of institutionalized and performance variety, the inevitable Chinese transfer and its positive role in intercultural communication as a result of its intelligibility and identity. In the third part, some evidences are shown here. The borrowing English words of Chinese origin are increasingly absorbed into some famous English language dictionary like the oxford English dictionary. As for the western media, they also accept and adopt this influential English variety. Therefore, we should adopt an objective and correct attitude towards China English, and we should actively apply China English in intercultural communication to promote Chinese culture to the world.