This is the first comprehensive work in English on the complex history and theory of traditional Chinese narrative. It describes the major Chinese conventions and strategies for interpreting narrative works, both historical and fictional, from the earliest narratives through those of the Ch'ing dynasty. For most of China's recorded history, historical authenticity and factual accuracy were paramount in the production and reception of narrative texts. Fictional narratives were theorized and judged in accordance with the standards of historical narratives. In short, narrative was history, and fiction was defective history. Furthermore, the state made great efforts to control fiction by suppression (censorship) and disavowal (denigration and trivialization). It was only with the widespread popularity of novels in the Ming and Ch'ing dynasties that Chinese theorists were able to come to terms with fiction and dehistoricize the poetics of narrative by allowing and recognizing invention and fabrication in narrative texts.