A new trifoliolate shrub, Pseudarthria panii (Fabaceae: Desmodieae), is described and illustrated. It resembles Pseudarthria viscida, but differs by its taller height, upright habit, late flowering, leaflets with an acuminate apex, longer light purple flowers, longer glabrous fruits, and more seeds. It occurs in the montane forest of China (Yunnan), Laos, Myanmar, Thailand, and Vietnam. Molecular evidence from the concatenated chloroplast fragments of rbcL and matK confirms its placement in Pseudarthria, which is a newly recorded genus from China, Laos, Thailand and Vietnam. The first collection of the new species can be dated back to ca. 120 years ago, i.e. Augustine Henry's collection in Yunnan during 1896-1899. A key to Pseudarthria is also presented.