The subtle and complex relation between Confucianism and modern democracy has long been a controversial issue, and it is now again becoming a topical issue in the process of political modernization in contemporary China. This paper argues that there are some quite basic early Confucian values and principles that are not only compatible with democracy, but also may become the theoretic foundation of modern democracy in China. Early Confucianism considers 'the people's will' as the direct representative of 'Heaven's will', with which it legitimizes political power. Confucian theory of 'human nature is good' endorses equal potential good for every man. These principles can be used in reasoning towards a system of democracy. In terms of decision-making, the Confucian 'Doctrine of the Mean' accords with certain democratic principles. The independent personality and committed individualism advocated by early Confucianism is a required civic merit in a democratic society. These fundamental Confucian principles, through contemporary hermeneutics, may provide a philosophic grounding for democracy and support the construction of a democratic system with a Chinese dimension. To get democracy rooted in the spirit of traditional Chinese culture will benefit the healthy and smooth development of democracy in China.