China has established the anti-dilution system of well-known trademarks in judicial practice. Confusion theory is used to protect well-known trademarks based on cross category confusion. The association theory attaches great importance to the interests of the trademark holders and emphasizes the "absolute protection", regardless of the possibility of confusion. The association theory is not enough to prove the rationality of trademark anti-dilution protection, and it is proved by the theory of free riding and other theories. The legislation of anti-dilution of well-known trademarks in China is wavering between the association theory and the confusion theory, which leads to the confusion in law enforcement and judicature. The free rider theory has proved the rationality of anti-dilution protection of well-known trademarks from the perspective of total social welfare. But the better way is to translate social cost into private cost, rather than by way of administrative and judicial power, to avoid association and dilution, and to avoid expanded application of anti-dilution of well-known trademarks.