A sentence in Chinese consists of Chinese characters strung together with equal spacing between individual characters. Usually two or more characters constitute a Chinese word, though a Chinese character can be a word in its own right. There are no particular markers to differentiate between Chinese words and characters in a sentence. For these reasons, it can be stated that, fundamentally, Chinese characters are the building blocks of Chinese reading. It is therefore important to understand how single characters are processed and organized in the mental lexicon. Here we are concerned with semantic processing in single Chinese character identification and categorization.

Approximately 80 percent of Chinese characters are phonetic compounds which are composed of a semantic radical and a phonetic (Zhou, 1978). In principle, the phonetic is a clue to the pronunciation of the whole character whereas the semantic radical is a clue to its meaning. This is a unique feature of Chinese phonetic compounds because clues for the meaning and the pronunciation of a character are separate and localized in two different parts of the character. This feature enables researchers to investigate the effects of semantic information and phonological information separately from orthographic information in character identification. This is much more difficult to do in alphabetic scripts.

There has been much research into the involvement of phonology in Chinese character identification (e.g. Fang, Horng & Tzeng, 1986; Hue, 1992).