Visual-orthographic skill is crucial to beginning readers when they learn to read. Confusion of the orientation of letters or words is common for beginning readers across different writing systems, especially for Chinese script with high visual complexity. The present study aims to explore children's early development of Chinese compound characters' orientation perception and its relation to their reading development. Ninety-two preschool children aged from 4 to 6 years participated in the study. They were instructed to finish two perceptual matching tasks (inverted orientation and mirrored orientation) which were presented on a touch screen. Results showed that 4-year-old children were sensitive to the inverted Chinese compound characters.However, 6-year-old children showed sensitivity to the mirrored Chinese compound characters. Additionally, children's reading ability was significantly correlated with the sensitivity of mirrored Chinese compound characters, even after controlling children's ages and their general cognitive ability. These findings indicate that different aspects of orientation sensitivity to Chinese compound characters demonstrated different developmental trajectories. Orientation sensitivity to Chinese compound characters may be an important early predictor for later reading development.