The development of reading skills may depend to a certain extent on the development of basic visual perception. The magnocellular theory of developmental dyslexia assumes that deficits in the magnocellular pathway, indicated by less sensitivity in perceiving dynamic sensory stimuli, are responsible for a proportion of reading difficulties experienced by dyslexics. Using a task that measures coherent motion detection threshold, this study examined the relationship between dynamic visual perception and reading development in Chinese children. Experiment 1 compared the performance of 27 dyslexics and their age- and IQ-matched controls in the coherent motion detection task and in a static pattern perception task. Results showed that only in the former task did the dyslexics have a significantly higher threshold than the controls, suggesting that Chinese dyslexics, like some of their Western counterparts, may have deficits in magnocellular pathway. Experiment 2 examined whether dynamic visual processing affects specific cognitive processes in reading. One hundred fifth-grade children were tested on visual perception and reading-related tasks. Regression analyses found that the motion detection threshold accounted for 11% and 12%, respectively, variance in the speed of orthographic similarity judgment and in the accuracy of picture naming after IQ and vocabulary size were controlled. The static pattern detection threshold could not account for any variance. It is concluded that reading development in Chinese depends to a certain extent on the development of dynamic visual perception and its underlying neural pathway and that the impact of visual development can be specifically related to orthographic processing in reading Chinese.