In Late West Han Dynasty (202BC-9), Buddhism came into China from ancient India. After a long time spread and development, Buddhism gradually became a strongly nationalized religion in China. Because of the difference of the entrance time, routes, areas, ethnic cultures as well as social and historical background, Chinese Buddhism formed three vivid branches: Han Buddhism(汉传佛教), Tibetan Buddhism(藏传佛教) and Theravada Buddhism(上座部佛教) in Pali spread in Yunnan Area
Han Buddhism : Buddhism spread to area of Han Nationality was called Han Buddhism. Through a long-term sutra translation, explanation and coordination, Buddhism naturally and complicatedly associated with Chinese Traditional Culture, and gradually formed a variety of schools and sub-branches vividly featured with Chinese Culture of Han Nationality. Spontaneously, the nationalized Han Buddhism was sent out to Korea, Japan and Vietnam.
The time that Buddhism was transported into Han Nationality Area has been not fixed yet. In accordance with some historical records, in Qin Dynasty, the Han Dynasty Area had been close to Buddhism and some monks had come into Han Dynasty Area of China. In West Han Dynasty, especially during the period from 139BC to 126BC, Zhang Qian(张骞,64BC-114BC) , the opener of the Silk Road, was sent to western area on a diplomatic mission. During his itinerary, Zhang Qian saw the Clothing of Shu Area, which meant the existence of folk communication between China and India and possibly the Buddhism also entered China amid the connection. Emperor Wudi also opened the seaway and connected with some points of east coast of India. Via the recent years' discovery of archeology, the Buddha statues had been carved out. Buddhism recorded in history entered Han Nationality Area of China around late West Han Dynasty. It centered on Xian, Luoyang and some other places like Xuzhou. Initially, Buddhism was considered as a secret technique for longevity, so people at the time equated Buddha with Lao Zi and Yellow Emperor.
In the period of Three Kingdoms and Wei-Jin and Southern and Northern Dynasties, it was the golden time of Buddhism to popularize in area of Han Nationality, it became the superior religious belief over other local beliefs. Buddhism was widely welcomed and believed by many people, even including the emperors, and some states were collapsed by expending the whole national finance. Hence the temple complexes and Buddhist sutra translations were both highlighted. Especially the sutra translation devoted much to Chinese music, Chinese poetry, Chinese philosophy and Chinese social system. In addition, believing Buddhism was a fashion at the time, nearly majority of the high-ranked officials and cultural elites believed this inbound but nationalized religion. Chinese Xuan Xue Ideology(玄学) flourished in West Jin and East Jin Dynasties assimilated a lot from Buddhism. To a great degree, the development of Chinese philosophy is based on the development of Buddhism.
In Tang and Song Dynasties, Buddhism influentially spread among Han People. Chinese literature and political system absorbed much from Buddhism. The neo-Confucianism largely learnt from Buddhism, and we call it Cheng-Zhu Li Xue(程朱理学) . At the same time, the internal theoretical system of Buddhism also trended to maturity. Many branches appeared such as Zen, Tiantai Sect, Pure-land or Sukhāvatī Sect, Mi Sect, Dharmalakana and Huayan Sect and so on apart from Mahayana Buddhism (Sanskrit for "Greater Vehicle") and Theravada Buddhism. Anyway, Buddhism in China realizes its aim at cultivating the mass on the earthly world.
Tibetan Buddhism, also called Vajrayana Buddhism, traditionally considered as the original body of Buddhist religious doctrine and institutions finally formed in the late period of the 10th century, and in the middle period of the 13th century, Tibetan Buddhism spread in Mongolian Area.
Theravada Buddhism, is another important locally influential branch of Buddhism in China, it is widely spreading and believed in Southwestern China, especially in Yunan province.
Chinese Buddhism additionally also gives us a honorable locally-born Buddha, Kwan-yin or Avalokitesvara(观音菩萨)，who is Chinese people's own Buddha for saving the people form disasters and despair. It is the only Buddhist Bodhisattva living in people's heart. Besides, Chinese art is directly influenced by Chinese Buddhism. Dunhuang Mogao Grottos, Datong Yungang Grottos and Luoyang Longmen Grottos are all the treasures of Buddhist culture in China.