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A study conducted three experiments focusing on understanding the information processes children use in learning to read Chinese, evaluating the learning differences between skilled and unskilled readers. To understand the strategies of character identification children use, participants in experiment 1, 10 Taiwanese elementary students (five skilled and five unskilled readers), were asked to read a story that they had not yet read. The experiment collected data using the verbal protocol of "thinking aloud." With the same participants, experiment 2 inspected the function of the "pin-yin" system for Chinese children's skill in reading characters and the mediation of the phonological principle of Chinese characters without pin-yin clues. Experiment 3 investigated whether or not the children can distinguish the semantic and phonetic cues of 30 characters and understand the function of cues in Chinese characters. This task asked participants, 40 Taiwanese students (divided into skilled and unskilled readers) in the same fifth grade (including the 10 students from experiment 1), to discern the elements of Chinese characters, according to the structure of Chinese characters. Results of these studies indicated that skilled readers used different strategies in identifying the unknown characters, relying on phonetic cues more than unskilled readers; unskilled readers used graphic similarity more often than phonetic cues during character recognition. In addition, unskilled readers paid more attention to sentence context. A significant difference between skilled and unskilled readers was their capability to coordinate the cues of characters. Based on the study's hypothesis and results, these experiments suggest that the two groups used different strategies in coordinating cues, and that skilled readers were more prone to adopt phonological principles in character identification; skilled readers might have better phonological knowledge than unskilled readers. (Contains four tables of data and 24 references. Appendixes reproduce material in the experiments in Chinese.) (NKA)