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Over the past two decades, the People's Republic of China has undergone significant transformation in its economy and its education system. The authors provide an overview of the changes in Chinese teacher education during the transition from central control to devolved management and decision making, and from a planned economy to a socialist market one. Two areas are considered. The first is how institutions of higher and teacher education respond to the challenges presented by this changing environment. The second is the major trends, priorities and direction of recent education reform.