When Buddhism entered China in the early part of the first millennium CE, it easily blended with the native Taoism. There are great similarities, such as their views on non-attachment, their philosophies of the ultimate nature of reality, most of their ethics, and many of their meditation practices. The differences are mostly superficial, lying in cultural differences—things like ritual or symbols—and in positions regarding metaphysics. Thus, despite these minor dissimilarities, Buddhist philosophy is in the end categorically and fundamentally congruent with the Tao.
Buddhism and Taoism are two very unique and interesting religions which developed independently of one another around the same time in two neighboring ancient civilizations. They did not come into contact until centuries after their establishment, and their most important figures never had any knowledge or interaction with one another. Taoism began most officially with the writing of the Tao Te Ching, which provides the philosophical and textual basis of Taoism. It is from the Tao Te Ching that over the milliennia Taoist philosophers, mystics, sages, and priests constructed their rituals, symbolism, social organization, and a more easily digestible metaphysics for the common man. By contrast, Buddhism was founded upon a man and his ideas, with nothing being written down until long after his death. The Buddha himself established the monastic organization and most of the metaphysics (allegedly). The Taoist polytheism and ancestor worship are both incongruent with Buddhist metaphysics, which holds that there are no eternal beings—all beings die and are reborn—thus ancestor worship and the belief in immortal gods is seen as wrong view. There are also differences in ritual which result from these differences in metaphysical perspectives.
Despite their independent creation in two very unique cultures, Buddhism and Taoism have a great number of deeper similarities. The range of different meditation practices are quite similar. Both have practices involving the quieting of the mind, examining the mind and senses of the body, contemplating the nature of reality, and entering into unity with the Absolute. The ethical beliefs of the two religions are also quite similar. There are certain virtues such as non-attachment and honesty, which one should master in order to be considered enlightened or “a sage.” Perhaps the most significant similarity between the two religions is their core idea of moderation, or walking the middle-ground between excess and self-denial. Buddhism calls it the Middle Way, while Taoism calls it the Tao, meaning “the Way.” Both “Ways” see the extremes of seeking more than one’s basic needs and denying oneself of their needs to be the source of basically all human suffering and strife.
It’s quite a testament to the human condition to consider that these two traditions arrived at so many similarities, despite the different environments in which they arose. And not only the human condition, but also the ultimate nature of reality—the highest, most transcendent, most immanent, most mysterious reality, called the Absolute, which both traditions came to describe in remarkable depth using almost the exact same descriptors. The Tao is in no way incongruent with the Dharmakaya, emptiness, Buddha-nature, suchness, or any of the other myriad Buddhist terms for the Absolute as relating to different situations or approaches. The interaction of these two religions was within a society where religious plurality is already an accepted norm, as expressed by the old Chinese saying: “Every Chinese wears a Confucian cap, a Taoist robe and Buddhist sandals.” In China it was never uncommon for people to incorporate aspects from all faiths into their spiritual lives. No rigid walls ever existed between the faiths or the people of faith, because religion was not approached in such a manner as it is in the Occident. So between such visceral similarities at the philosophical, mystical, and ethical dimensions of the two faiths, and the relations taking place in such a pluralistic society, it is no surprise that Buddhism finally became acceptable to the ancient thinking of the Tao.