China Daily News was founded at 105 Mott Street by the Chinese Hand Laundry Alliance, a rival of the Chinese Hand Laundry Association and the Chinese Consolidated Benevolent Association. Labeled a communist paper by its rivals, The Daily News was certainly leftist and was attacked for celebrating the founding of the People's Republic of China in 1949. Some rumors even suggested that the Alliance was quietly aided by the Communist Party in China in the early years of its formation.

A congressional record from 1942 wrote that the paper was suspicious, though it was helped by the fact that it was printed in Chinese and "a considerable amount of translating would be required to ascertain whether or not the paper adhered to the Communist Party line."

However, by 1952, the paper was charged with violating the law by the United States Department of Justice. Two years into the Korean War, the China Daily News had been advertising ways for subscribers to skirt the Trading with the Enemy Act. The paper was caught publishing instructions on how to send remittances to families in China. Manager of the Daily News Eugene Moy was found guilty and sent to jail, where he died a few years later. Some staff members of the newspaper were deported, some fled the country voluntarily. To make matters worse, newspaper vendors were fearful to even carry the paper. Reportedly, even subscribers were hounded by the FBI.

The paper survived the Cold War, but just barely. It was funded by leftists across the country who donated to its cause. The small circulation finally ceased to exist in 1989, as did the Chinese Hand Laundry Alliance.