In order to address the digital revolution that has challenged copyright protection, China has carried out a series of legislative attempts at developing an indirect copyright liability system in recent years. The joint tort oriented, knowledge-centered liability attribution rules and a set of borrowed safe harbor provisions from the United States have set out the rudiments of the indirect copyright liability regime to deal with digital copyright infringements. However, there have been constant debates on the confusing joint tort law underpinnings, the inconsistent knowledge standard and the conflicting nature of safe harbors, which are major factors impeding the effective copyright law enforcement and the efficient operation of the intermediary’s business. Through analyzing current rules in China and the United States, this article finds that compared to the borrow-to-use approach, a more efficient build-to-suit approach for a viable legal transplantation is recommended. To construct an efficient, well-balanced and predictable indirect copyright liability system for dealing with digital copyright infringement in China, this article proposes an independent-tort theory and a culpable conduct based indirect liability system, with modified safe harbor provisions. In this way, a justified and compatible indirect liability system can be optimized through equilibrium among relevant parties.