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Nowadays
simplified form characters are used in China and Singapore,
traditional form characters are still used in Taiwan, Hong Kong and most of
overseas Chinese communities.
In 1952, literacy for peasants was defined as knowledge of 1,500 characters and literacy for labour workers as knowledge of 2,000 characters.
A well educated person can probably recognize more than 6,000 characters.
Since Chinese words are generally composed of two or three characters, a few thousand characters can be used to understand hundreds and thousands of words.
The Chinese computerized fonts for words processor include 6,500 characters of
simplified form and 13,500 of
traditional form.

Rosie From Learn Chinese Language Online (http://www.learn-chinese-language-online.com)
The goal of Learn Chinese Language Online (LCLO) is to reduce the Mandarin Learning curve, promote and introduce the most efficient way to grasp the broad foundation of Chinese language.