This paper ®rst outlines the evolution of phonetically based annotation systems for Chinese as well as the history of policies of monographia and digraphia in China since 1892. Section 2 outlines the nature of Chinese characters, while section 3 presents a history and assessment of the last one hundred years of debate on the advantages and disadvantages of Chinese characters. Section 4 describes the history and evolution of the now standard Hanyu Pinyin Chinese Phonetic Alphabet, especially in the light of recent technological developments. Section 5 presents our conclusion that some form of digraphia between Chinese characters and Hanyu Pinyin romanization is ``imperative'' for China's success in the twenty-®rst century.