In the bigger, more internationalized cities in China, the streets are crowded, but the drivers seem to be following a pretty standard set of driving rules. Pedestrians cross at the crosswalks. Bikes have their own lanes.
Not so in the more rural areas of China (or even medium sized cities). When I first arrived in my city, I could not figure out the rules that were governing the traffic flow. Everyone seemed to be all over the road (and sidewalk) and no one really seemed to be paying much attention to anyone else. I was so confused that I was fearful of trying to cross the street by myself and violating one of the unwritten rules and getting hit by a taxi. But, obviously, there were some rules to be learned, because it was incredibly rare to see an accident for how many people were moving on the street at one time. Over time, I started to learn the rules and I even became confident enough to ride a bike out in the middle of the madness.
As far as I can tell these are the rules that govern driving in China:
1. Trust Everyone Else. This is really hard to do, but it is necessary. For the rules to work, everyone has to play fair. Besides, because actual traffic patterns are flexible, it is impossible for you as an individual to deal with anything besides what is directly in front of you. Don't try to determine what the people beside you or behind you are going to do. Trust that they are following the same rules that you are. Only worry about the things directly in your path and worry about rule 2.
2. Don't Hit Anything. OK, I know, this rule seems ridiculously obvious. But it is really important. In America, we think far more about who has the right of way then about if we're going to hit something. In China, you are only concerned about not hitting anything else. If you are going to hit something, you should stop or change your path. If you are not going to hit anything, you can move on to rule 3. . . . only care about what is in front of you, not your sides or back
3. Go forwards and don't make any sudden changes. Other people need to be able to plan if they are going to hit you.
4. Stay in your lane. Whatever "lane" means at this point in time with all these people moving around.
5. Optimize traffic flow. It is no good to be greedy if traffic will just back up for the next hour. If you move a little so someone can move the opposite direction, so the person in front of you can move a bit farther, then you should do it.
What these rules mean is that traffic in China is a constant merging process. There are incredibly few traffic lights (usually smaller streets just yield to the larger streets), instead, you just merge across the intersection. There are motorcycles and carts and bikes and pedestrians merging in and out of traffic at all times. As a pedestrian, if you want to cross the street, you pretend you are playing a game of frogger. When there is a break in the traffic in the lane in front of you, you walk across it and stand on the line. You may have to wait here until space opens up in the next lane. The cars won't hit you, just stand still and wait. Don't run, you'll only confuse the drivers, they're used to having pedestrians stand in the middle of the lane of traffic. OK, move onto the line that separates the two sides of the road . . .