The contents and characters of their folktales have undergone a great deal of transformation throughout China's long history, from simple, primitive forms to more humanistic sociocultural depictions. This is evident in, for example, a comparison of the early legends in San Hai Ching with the later, popular stories of the Tang dynasty.

Chinese folktales can be divided into six categories: idioms, fables, mythology, epics, folktales, and historical fiction. The shortest tales are only a few sentences of classical Chinese, whereas the longest ones can fill several volumes. For example, the Tibetan epic The King Gesar is the longest epic that has ever existed. Most Chinese folktales reveal to a certain extent the social reality of different dynasties and ethnic groups.  Many of them use both real and fictitious animals, such as dragons, horses, eagles, tigers, and snakes, as the main characters.  Their use reflects the cultural traditions and environment of the tale’s nationality of origin.

The “Dragon King’s Daughter” is one of many Tang dynasty (A.D. 618-907) stories.  It was widely told in China, and has been restructured in various forms in different times and regional areas.  For example, in Yuan drama, we can find two plays based on the same story, both of which have been favorites in China since the Yuan dynasty (1260-1368).

The story describes two levels of the world—human and nonhuman.  It shows that a female’s life is no better in the nonhuman world than in the human.  Reflecting traditional social prejudices, many Chinese folktales appear to devalue women’s status in society.  Women suffered greatly under the traditional way of life.  Although a woman was destined by fate to be either good or bad, her life was usually determined by her unknown future husband and family.  Yet, the story also expresses a strong belief in sharing the benefits of human morality, justice, and dignity.

Liu Yi meets the wretched shepherdess

In the seventh century, a young scholar named Liu Yi lived in the valley of the Xiang River.  One year he failed to pass the annual examination for an official appointment, which was given in the capital city.  Returning home, he decided to make a detour and visit a friend who was staying at Jingyang at the time.  Some time after he set off, his horse was startled by a hare dashing across the road; it burst into such a frantic gallop that he could not restrain it until it had run over two miles.