Quality is at the heart of education and teachers play a crucial role to provide quality education. Since the 1980s, there has been a dramatic educational reform in China and teacher education is referred to" the manufacturing tool" of education. Currently, China has more than 10 million school teachers, supporting the world's largest education system. After more than one hundred years of development, teacher education in China, as a changing system, has come a long way and is now experiencing a crucial transition period in the context of globalization and China's social and economic reform. This article first reviews the new developments of teacher education in China, then it examines the emerging challenges, discuss the major problems with the existing teacher education for development. Finally, based on its analysis, the article argues about the policy implications for strategic reform. New Developments of Teacher Education in China 1.1 Gradual structural optimization of teacher education institutions Teacher education institutions in China are mainly composed by four-year normal universities and colleges, three-year teacher colleges and secondary normal schools (the three-level teacher education system), which train teachers for senior and junior secondary schools and primary schools respectively. So far, teacher education institutions at all levels have not only prepared millions of qualified teachers for secondary and primary schools but also have trained thousands of teachers through in-service means. They have made historic contributions to basic education, especially for the development of nine-year compulsory education and upgrading the quality of education in the country. Ever since the Fifth National Conference on Education was held in 1999, China's teacher education has been focusing on the quality of teachers rather than quantity, on the structural adjustment and institutional efficiency. With the demand for improved teacher's professional competence, the structure of teacher education institutions has gradually been changed. The old three-level system has moved on to a two-level teacher education system and is advancing to one-level (the normal university). Graduates from teacher education institutions are moving to a higher level. For example, the ratio of graduates from normal universities and colleges to those from secondary normal schools changed form 10:90 in 2001 to 68:32 in 2005. Statistics show that between the year 1997 and 2005: -The number of four-year normal universities increased from 74 to 117; -The number of three-year teacher colleges declined, from 151 to 65; -The scale of secondary normal schools is gradually shrinking, from 892 to 244