This study investigated the development of the basic literacy skills of Chinese students with literate difficulty (LD), who were pupils in grades 1 to 3 and represented the lowest 15% of Chinese poor readers. They were compared with normal peers in character-recognition, word decoding, and dictation (i.e. character writing). About two hundreds students were assessed at five time periods, starting from the fall semester of grade 1 to the fall grade 3, with the use of the Battery of Chinese Basic Literacy (BCBL) for a cross-sectional design. There were 1009 students in total and about 150 poor readers were included. The trend of development in recognition, decoding, and dictation as proposed by Dai (1999) was found in both normal and poor reader groups. The groups’ performance on recognition, decoding, and dictation differed significantly for the five periods. Such difference indicated different levels of difficulty, with recognition being easier than decoding which in turn being easier than dictation. More than 80% of the first-grade students could recognize and decode 80% of the Chinese Basal Characters (CBC) but dictated only one third of the CBC. As for the third-grade students, they could dictate more than 80% of the CBC. The poor readers showed a similar trend in development as the normal peers but lagged behind them for about two academic years. They could not recognize or decode 80% or more of the CBC until the second semester of grade 2. Even after they moved to grade 3, they could dictate only about 60% of the CBC while the normal students could dictate about 90% of the test. Given that they managed to catch up with the normal peers in decoding skills, they stayed far behind the latter in character-writing skills and reading fluency. Also, character frequency and the number of the stroke in Chinese character could distinguish both groups significantly for their skills in word-recognition, decoding,and dictation.