[Here's something I wrote way back in 2000, shortly after coming to China. I still think it's pretty accurate.]
The linguistic situation in China is truly mind-blowing. Most people with a basic knowledge of China know that Mandarin is the official language, though quite a lot of people also speak Cantonese (in the south, in areas like Hong Kong and Guangzhou). Those people might also know that there are many more languages in China, spoken by various minority groups. All this is true, but this assessment barely even scratches the surface.
In reality, almost every person in Eastern China (developed China, not the countryside) is at least bilingual. China is a vast patchwork of languages, with every single town speaking its own brand of Chinese. Chinese people call these “dailects”, but it’s not actually that simple. When Americans think of dialects, we might think of black English, or the English of the American South, or of England. Though there might be some communication difficulty (with certain dialects in particular), communication between speakers of different dialects can generally proceed.
Chinese “dialects” are not so. This is largely because tones are a vital part of the Chinese language, and tones (as well as other sounds) vary from “dialect” to “dialect”. Neighboring towns tend to speak varieties of Chinese which can be mutually understood, but if you go just a little further away to another town, communication often breaks down completely. Since mutual intelligibility is generally accepted as the basic dividing line between dialect and language, these “dialects” are actually separate languages. Thus, this means that every town in China speaks a separate language! Since most people in China speak their hometown language as well as Mandarin, that means almost everyone is bilingual! Furthermore, many people who have moved from city to city can speak or at least understand more than one local language (and can understand the closely related ones as well).
So what we have here is a vast lingual patchwork with countless patches, and where one patch ends and the next begins is unclear. In addition, Mandarin is laid on top of that patchwork, lending cohesion to the linguistic mess. This is not to say that Mandarin is completely standard (or even necessarily often spoken) throughout the nation. It’s not (though much more so in northern China). This is where the true dialects come in — the local languages of different regions affect the way Mandarin is pronounced and used, but mutual intelligibility is preserved. Thus, the Mandarin of Beijing, of Shanghai, and of Taiwan are not the same. They each have their own dialect of Mandarin. In some parts of China like Guangzhou and Hong Kong, Cantonese is spoken more often than Mandarin.
Thus, China is a land of countless languages, united under one government. Calling the separate languages merely “dialects” and downplaying the linguistic disparity (and individuality) actually serves to help unify the country. It’s easier to consider people your fellow countrymen when they are merely speaking a “dialect” of the same language instead of a separate language. Even more unifying than the government’s psychological manipulation through words, though, is the Chinese written language. Despite the differences in the great array of languages — the differences in word pronunciation, in tone (sometimes even in number of tones), in grammatical usage, etc. — they all use the same Chinese characters in written form, with the exception of some minority languages. Any literate person in China (with the exception of some minorities) can read a Chinese newspaper aloud, character for character, in his native tongue, and it will be understood by native listeners, but not by most people from other regions of China. Read aloud in Mandarin, the official language of China, it will be understood by most people throughout China.
Because China is such a multilingual country, the use of Chinese characters and of Mandarin as the official language of China were crucial prerequisities to China’s modernization. Chinese characters have of course been around for thousands of years, but the adoption of one official language for the country did not take place until the beginning of the 20th century! It is perhaps one reason why China got a slow start on modernization. In selecting one language as the standard for the entire country, China was actually following Japan’s example. Japan underwent the same process as a precursor to its modernization. Perhaps because of its vastness, or maybe also because of its particular linguistic situation, China to this day does not have the linguistic cohesion that Japan does. Japan cannot be said to be a country of many languages (although in addition to Japanese it does have the the language of the Ainu, the aboriginal Japanese). To be sure, each part of Japan speaks a distinct variety of Japanese, but these are merely dialectual differences, and do not depart from mutual intelligibility for the most part.