 Taoist cosmology is cyclic ; relativity , evolution and ' extremes meet ' are main characters . It shares similar views with the School of Yin Yang which was headed by Zou Yan ( 305 – 240 BCE ) . The school 's tenets harmonized the concepts of the Wu Xing ( Five Phases ) and yin and yang . In this spirit , the universe is seen as being in a constant process of re @-@ creating itself , as everything that exists is a mere aspect of qi , which , " condensed , becomes life ; diluted , it is indefinite potential " . Qi is in a perpetual transformation between its condensed and diluted state . These two different states of qi , on the other hand , are embodiments of the abstract entities of yin and yang , two complementary extremes that constantly play against and with each other and cannot exist without the other . 
