How do chinese people type?

They've got like fifty thousand letters in their alphabet, how do they fit all that in the keyboard?

>>10
It's easy to create new concepts with chinese characters,  just string them together.  There's an advantage in doing it this way also as Hanzi have certain meanings or connotations, and phonetic characters do not. 
Anyone who knows Kanji, Hanzi, etc. can usually understand a new word easily, whereas when someone who can read katakana sees a new word they only know how to speak or read it, and have no idea what it means.