Part of this song was inspired by a 1938 children's book called The Five Chinese Brothers, which is based on a traditional Chinese tale. In this story, each of the brothers possesses some form of supernatural power. One, who has the ability to hold an ocean in his mouth (hence the line in the song "Seven Chinese brothers swallowing the ocean"), agrees to help a young boy who wants to gather fish. Greed consumes the boy and he refuses to return to the shore when called. The Chinese brother cannot hold the ocean any longer and, in letting the waters return, the boy drowns. The brother is subsequently found guilty of causing the child's death. However, when sentenced to be hanged, the accused brother changes places with one of his identical siblings who just so happens to possess a neck that cannot be broken. When this form of execution predictably fails, the brother is sentenced to be burned to death. Again a switch occurs, this time with a brother possessing the ability to resist fire. An updated version of the tale published in 1992 - a decade after the R.E.M. song was released - featured seven brothers.
This was the second track on R.E.M.'s sophomore album, Reckoning, which was recorded at Reflection Sound, Charlotte, North Carolina and produced by Mitch Easter and Don Dixon. R.E.M. taped the album shortly after completing a grueling tour opening for The Police, which left singer Michael Stipe exhausted and withdrawn.
Dixon recalled to Uncut magazine August 2009 the recording of this song: "Reflection had a stairwell that went from the Control Room down to Studio A. It had a large landing that Mitch and I had set up for Michael to have as his private domain. We were working on the vocal for '7 Chinese Blues,' but Michael just wasn't into it. He was down in his stairwell. I hit the talk-back to let him know I was coming through to make an adjustment… This was just an excuse to take a look at him, see if I could loosen him up a little. While I was in the attic, I'd noticed a stack of old records that had been taken up there to die, local R&B and gospel stuff mostly. I grabbed the one off the top (a gospel record entitled The Joy of Knowing Jesus by the Revelaires) and as I passed Michael on the way to the Control Room, I tossed it down to him. I thought he might be amused. When I fired up the tape a few seconds later, Michael was singing, but not the lyrics to '7 Chinese Blues.' He was singing the liner notes to the LP I'd tossed him. When Michael began to sing these liner notes, he was much louder than he'd been earlier and it took a few seconds for me to realize what was going on and adjust the levels. He made it all the way through the song, working in every word on the back of that album! I rewound the tap, we had a chuckle and proceeded to sing the beautiful one-take vocal of the real words that you hear on Reckoning. He seemed more confident after that day."