This study aims to identify the predictors of Chinese reading and literacy skills among Chinese school children in Taiwan. Participants recruited in the study were 182 Grade 1 elementary school students. First, data were collected on these students' literacy skills, which comprised morphological awareness, orthography processing, visual perception skills, phonological awareness, and rapid automatised naming. In Grade 2, data were collected from these students on their word decoding skills, which comprised character recognition and reading fluency. Finally, in Grade 3, data were collected on the Chinese comprehension skills of the same students. A structural equation model examined the direct and indirect effects of students' literacy skills at Grade 1 on their reading comprehension at Grade 3, with students' word decoding at Grade 2 acting as a mediator. Results showed that reading comprehension of students at Grade 3 was predicted by their literacy skills at Grade 1.