Allocating appropriate funds to the provision of non-market public goods must be based on appropriately measuring the benefits gained. The Contingent Valuation Method (CVM) is a technique based on stated individual preferences, which has been extensively used for assigning monetary values to goods such as those provided by the ecosystem. But due to the hypothetical market it employs, the validity and reliability of the method has been controversial especially since 1993. This paper is a review on the above field. This paper can be divided into the following three parts. (1) CVM has been primarily developed by economists and is founded on neo-classical demand theory. Its core assumption is that the preferences of consumers are stable. But the present abundant literature has shown that results of CVM often appear to be inconsistent with this core assumption and the expectations of economic theory. The dependence of CV outcomes on the hypothetical situation the respondent is to value (content dependence) and the often large divergences between WTP and WTA measures of benefits raise question about whether measured benefits in one study can be transferred to other locations or situations. This paper cites many CVM case studies to illustrate these anomalies and summarize different explanation;(2) Based on a general review of CVM research in China, the authors points out that the absence of tests of validity and reliability will hamper the future application and practicality of costbenefit analysis;(3) The paper puts forward multiple schemes for establishing CVM's validity and reliability testing which are in accordance with the ecosystem characteristics and social structure particularities in China based upon a previous case study about the ecological restoration of urban river in Shanghai. The scheme provides some direction and suggestions for future research in China. Improving validity and reliability is the key for CVM to being applied in practice and to making a decisive input to policymaking. In spite of not reaching a conclusion it is a hot problem in developed countries but not in China. Despite the different social circumstance, further studies including this paper are necessary and urgent for the application of CVM in China.