This study examined compound awareness in relation to Chinese children's vocabulary acquisition and character reading. Two aspects of compound awareness were investigated: the ability to identify the head of a compound noun and the ability to construct a new compound word from familiar morphemes. The compound awareness tasks, along with rapid automatized naming (RAN) and phonological awareness tasks, were administered to 29 first graders and 30 second graders in Mainland China. Results show that (1) compound awareness develops relatively early among Chinese children and improves with age, (2) compound awareness explains unique variance in vocabulary and character reading, after controlling for age, RAN, and phonological awareness, and (3) the contribution made by compound awareness to vocabulary is much larger than the contribution made by phonological awareness. These results demonstrate that compound awareness plays a central role in Chinese children's literacy development, particularly in vocabulary acquisition.
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