Chang'an was not only the capital of the vast Tang empire 唐 (618-907), but also a center where different cultures of whole Asia came together. It was the eastern end of the long caravan ways that led to the Near East ("near" from the European standpoint). Buddhism once came along the Silk Road to China, and during the Tang period merchants brought the Islam (yisilanjiao 伊斯蘭教) from Arabia and Persia. But even Zarathustrian (xianjiao 祆教) and Manichean thought (monijiao 摩尼教) from Persia and Nestorian Christianity (jingjiao 景教) reached China and found followers and believers. Even Jews were found under the foreign merchants that came to China.
Daoism (daojiao 道教) originally was no state-protected religion in China. The nature-near thought was held privately by many social classes, especially by the aristocracy of the lower Yangtze valley during the Northern and Southern Dynasties period (Nanbeichao 南北朝, 420~589). During the Tang period Daoism was held in high esteem by the court because the surname of the Daoist philosopher-god Laozi 老子 was Li 李, like the surname of the Tang emperors.
Buddhism (fojiao 佛教) had reached its maturity at the begin of Tang Dynasty. All social groups in China brought up believers in the foreign religion. But Buddhism had already become a Chinese religion by several steps of assimilation. Clerics and monks were not longer seen as independent from state, law and society. Although Tang emperors generally were more fond of Daoism, most great personalities also protected Buddhism, especially Empress Wu 武則天 (r. 684/690-704) who sponsored some of the great works at the Longmen caves 龍門石窟. But several reasons led to the great proscriptions of the 9th century, especially in 845, among them the accumulated wealth by the monasteries and the case that many people entered the Buddhist community to escape military service and tax duty. A third reason was the revival of Confucianism (rujiao 儒教) whose representatives wrote manifests against the foreign religion, accusing it of destroying the social system of duty and rights of upper and lower persons.
The Tang era was the great age of pilgrimages to India, the cradle of Buddhism. The most important pilgrim was the translator Xuanzang 玄奘 (traveled 629-645) who brought back many sutras and created rules for translating the sutras into Chinese. Xuanzang travelled by land and wrote a report of the countries he saw, the Da-Tang xiyu ji 大唐西域記 "Report of the regions west of Great Tang". His adventures became the object of many theatre plays and novels, like the famous Ming time novel Xiyouji 西游記 "Journey to the west". Another pilgrim who went to India and Ceylon by ship, was Yijing 義淨 who started his journey in 671. Chinese reports are the only sources we have about long periods of Indian history. Pilgrims did not only go to India, but Tang Buddhism produced an intensive flow of missionaries to and from Korea and Japan. Chinese monks went to Japan, like Jianzhen 鑒真 (Japanese: Kanjin), and Japanese monks spent years in China, like Kukai 空海 (Chinese: Konghai), the founder of the Shingon School 真言宗 (Chinese: Zhenyan), and Ennin 圓仁 (Chinese: Yuanren) who wrote an impressive diary about his adventures in China.
With its features becoming more and more Chinese, Buddhism in China developed its own schools or sects (zong 宗 or jiao 教). The most impertant schools are the Pure Land School (jingtujiao 淨土教 or jingtuzong 淨土宗) that focuses on the simple Amitabha cult; the Tiantai School (tiantaijiao 天台教 or tiantaizong 天台宗) was founded by Zhiyi 智顗; Fazang 法藏 founded the Garland School (huayanjiao 華嚴教 or huayanzong 華嚴宗), basing on the "Garland Sutra" Huayanjing 華嚴經; a very special school that renounced dogma, asceticism, rites and the traditional monastery system, was the Chan School (chanjiao 禪教 or chanzong 禪宗) (better known with its Japanese pronunciation Zen), founded by Bodhidharma and Huineng 慧能. The believers of Chan relied on riddles and spontaneous actions to achieve enlightenment. It was the Chan School that also developed the worldwide known fighting techniques (gongfu 功夫, "Kung-fu") in the Shaolin Monastery 少林寺. For more about the Buddhist schools see the Buddhism chapter.
Other important Buddhist literature was the encyclopaedia Fayuan Zhulin 法園珠林 "Forest of Gems in the Garden of Law" by Daoshi 道世, and the "Great Cloud Sutra" Dayunjing 大雲經 (sanskr.: Mahamegha-sutra) that Tang emperors had prayed for the benefit of the state.
The closing of the Central Asia routes by Arabs and Tibets in the 10th century, along with the persecutions of the 9th century, ended the great age of Buddhism in China. It became a silent religion, like Daoism, and could keep its many followers among the populace until today.