Background The early identification of pre-frailty and frailty among older people is a global priority because of the increasing incidence of frailty and associated adverse health outcomes. This study aimed to validate the Groningen Frailty Indicator-Chinese (GFI-C), a widely used screening instrument, and determine the optimal cut-off value in Chinese communities to facilitate pre-frailty and frailty screening. Methods This methodological study employed a cross-sectional and correlational design to examine the psychometric properties of GFI-C, namely, internal consistency, stability, and concurrent and construct validities. The appropriate cut-off values for pre-frailty and frailty screening in the receiver-operating characteristic (ROC) curve were determined through sensitivity and specificity analysis. Results A total of 350 community older people had been assessed and interviewed by a nurse. The GFI-C showed satisfactory internal consistency (Cronbach’s α = 0.87) and two-week test-retest reliability (intra-class correlation coefficient = 0.87). Concurrent validity (r = 0.76, p < 0.001) showed a moderate correlation with Fried’s frailty phenotype. The known-groups method, hypothesis testing and confirmatory factory analysis (three-factor model; χ2/df = 2.87, TLI = 0.92, CFI = 0.93, GFI = 0.92, RMR = 0.014; RMSEA = 0.073) were suitable for the establishment of construct validity. Based on the ROC and Youden’s index, the optimal cut-off GFI-C values were 2 (sensitivity, 71.5%; specificity, 84.7%) for pre-frailty and 3 for frailty (sensitivity, 88.2%; specificity, 79.6%). Conclusions The result indicated that GFI-C is a reliable and valid instrument for pre-frailty and frailty screening among older Chinese people in communities. For optimal diagnostic accuracy, the cut-off values of 3 for frailty and 2 for pre-frailty are recommended.