The Basic Rules:

 
The Board:

Chinese Chess board is made of 10 horizontal lines and 9 vertical lines. The pieces are placed on the intersections of the lines which are also known as points.

The area shaded in red is the red palace, and the area in black is the black palace. The various "L" shaped markings indicate where the pawns and cannons start off at.

 
The Pieces:

Note that the red and black pieces may have different images, however they move in the same way.

Chinese Pieces

Movement

Traditional Chinese Set

Rook

The Rook can move any  number of spaces either vertically or horizontally. It may not pass over occupied spaces, and ends its move by occupying an empty space or by capturing an enemy piece.

Traditional Chinese Set

Horse

The horse moves two point in one direction followed by one point perpendicular to the first line. (L shape movement) If the immediate point next to the horse is occupied, then it cannot make any movement in that direction.

Traditional Chinese Set

Elephant

The Elephant moves exactly two points diagonally. It may not leap over occupied point. Elephants could only stay on their home side of the river.

Adviser

The Adviser moves one point diagonally. It could not leave the palace.

King

The King moves either horizontally or vertically one step inside the palace.

It is an illegal position when two Kings face each other vertically without any pieces between them.

Cannon (Pao)

The Cannon moves passively as the Rook. The Cannon moves to capture as the Rook, however it is required to hop over a single piece before capturing the opponent's piece. Cannons only capture when hoping and only hop when capturing. They may never hop over more than one piece in a single move.

Pawns

Chinese Chess Pawn's passive and capture moves are always the same. A Pawn can only move one point straight-forward until it crosses the river. The pawn may then move one point left, right or forward. Pawns not promote on the last rank.

 

Other rules

  1. Red moves first.

  2. The game is won by checkmating or stalemating the opponent King.

  3. You cannot capture your own units

  4. Perpetual check is forbidden. You cannot check your opponent more than three times in a row with the same piece and same board positions.

  5. Perpetual Chase is forbidden - You cannot force an enemy piece to move to and from the same two points, indefinitely. The purpose of this rule (and the above rule) is to avoid forcing draws. Some of these situations are complicated, but the person who is forcing the perpetual move must usually stop the perpetual chase.

  6. The game is a draw when neither side can force a checkmate or a stalemate or under requests of both players (intentional draw).

The rules vary slightly in different competitions as they may add in maximum number of rules before drawing. The full Asian rules are much more complex to  and was developed by the Hong Kong Chinese Chess Association (HKCCA) in 1979 and officially became a standard rule in 1989. The full set of rules could be found here.