For more than 20 years the People's Republic of China has engaged in a significant transformation of its economy and social institutions, including its education system. This article provides a general picture of what changes have taken place in Chinese teacher education at a time of rapid transition from central control to devolved and distributed management and decision making, along with the country's shift from a planned economy to a socialist market one. Two major topics of this work focus on how institutions of higher and teacher education respond to the challenges of the changing environment, and on the major trends, priorities and direction of recent education reform. Embedded in the discussion are issues such as the merger and amalgamation of institutions, teachers' professional development under the auspices of market and knowledge economy, educational information, internationalisation and others, and their effects on Chinese teacher education both in the short and the long term. (Contains 2 notes.)