I thought it might be helpful to lay out how Chinese and Chinese-flavored civs have been handled in some other games. (Ahwaric said he first wants to do a Chinese-flavored civ, so that's what I focused on.) Hope some of these ideas will be useful.
In Age of Empires, the Shang have the following:
a) Villagers that cost 30% less; and
b) Wall hit points doubled.
In Age of Empires II, the Chinese have the following:
a) Start with additional villagers but fewer initial resources;
b) Technologies cost less;
c) Town Centers support more population;
d) Demolition ships have more hit points;
e) Unique unit is the Chu Ko Nu (fast-firing crossbowman); and
f) Unique technology is Rocketry, increasing the pierce attack of Chu Ko Nu and scorpions.
In Rise of Nations, the Chinese have the following:
a) Science research is cheaper;
b) Certain upgrades (Medicine, Herbal Lore, and Pharmaceutical) are free;
c) Non-military units (Citizens, Caravans, and Merchants) are created instantly;
d) All cities start out as Large Cities; and
e) A line of unique units that begins with Fire Lances and upgrades to Heavy Fire Lances, Manchu Musketeers, Manchu Riflemen, and Manchu Infantry.
Age of Empires III I havent played much, and have never played the Asian Dynasties expansion, so Im working from the manual, which says that the hallmarks of the in-game Chinese are an advanced knowledge of gunpowder and a well-organized military. Some specifics:
a) Villages provide more population than a House and can garrison villagers and fatten livestock;
b) Gets siege earlier than all other civilizations;
c) Unique units are Chu Ko Nu, Qiang Pikeman, Arquebusier, Changdao Swordsman, Steppe Rider, Keshik, Iron Flail, Meteor Hammer, Flamethrower, Hand Mortar, and Flying Crow;
d) Armies train in groups of mixed units called Banner Armies.
In Civ 3, as many of you know, the Chinese UU is the Rider (replacing the Knight), and the civ traits are Militaristic and Industrious.
In the Civ 3 Warhammer mod, the Chinese-flavored Civ is called Cathay:
a) Civ traits are Industrious and Commercial.
b) Their UUs include the Stone Crossbowman (upgrades to Chu Ko Nu) and the Rider (upgrades to Heavy Rider).
c) Also, there are some units that are available only to Cathay and the Japanese-flavored Civ, Nippon: e.g., Arquebusier, Temple Dog.
d) And there are some wonders that are buildable only by the East Asian-flavored civs I havent played Orbis in a while, so I dont know if you want to have world wonders buildable only by one or two civs, so I'm not going into that here.
In Civ 4 BtS, the Chinese UU is the Cho-Ko-Nu (replaces the Crossbow, gets 2 first strikes instead of 1 and does collateral damage), UB is the Pavilion (replaces the Theater).
And finally, in Rhyes mod the Chinese unique power is called Myriads and allows them to train melee and gunpowder units 1.5X faster.
So, some possibilities for the Dao based on the foregoing.
Population
1) Settlers and workers cost less (straightforward, but boring); or
2) Settlers and workers produced without food (I kind of like this, would make them unique, since no other civ has a mechanic like this); or
3) New cities start out with a population of 2 (could combine this with number 2, maybe).
Technology
1) Easiest way to give the Dao a tech bonus is to make buildings like the Elder Council, Library, and Alchemy Lab cost less for them.
2) Or, you could give them a UB replacing one of the research buildings and providing additional beakers.
3) Another possibility would be to use the Pavilion UB from BtS but give it a science bonus.
4) Each city could start out with a sage specialist (would work if new cities start out with a population of 2).
5) Just thought of this: they could build Academies without needing a Great Sage (not sure what the prerequisite tech would be).
Archery and Siege
Chu Ko Nu seems like an obvious UU for a Chinese-flavored civ. Could give all their archery units Barrage I, in addition.
I dont know if/how you might want to reflect gunpowder or siege abilities:
-- Maybe giving their archery units Barrage I would suffice for their Arquebusiers;
-- And perhaps allowing them to build Catapults and Cannon earlier than other civs;
-- Maybe have gunpowder revealed to them by an earlier tech, if thats possible;
-- Or have their gunpowder units cost less.
Anyway, just some thoughts for people to consider.