Cued Speech (CS) is a communication system developed for deaf people, which exploits hand cues to complement speechreading at the phonetic level. Currently, it is estimated that CS has been adapted to over 60 languages; however, no official CS system is available for Mandarin Chinese. This article proposes a novel and efficient Mandarin Chinese CS system, satisfying the main criterion that the hand coding constitutes a complement to the lips movements. We propose to code vowels [i, u, y] as semiconsonants when they are followed by other Mandarin finals, which reduces the number of Mandarin finals to be coded from 36 to 16. We establish a coherent similarity between Mandarin Chinese and French vowels for the remaining 16 vowels, which allows us to take advantage of the French CS system. Furthermore, by investigating the lips viseme distribution based on a new corpus, an optimal allocation of the 16 Mandarin vowels to different hand positions is obtained. A Gaussian classifier was used to evaluate the average separability of different allocated vowel groups, which gives 92.08\%, 92.33\%, and 92.73\% for the three speakers, respectively. The consonants are mainly designed according to their similarities with the French CS system, as well as some considerations on the special Mandarin consonants. In our system, the tones of Mandarin are coded with head movements.