The Cenozoic in East Asia is marked by major changes in tectonics, landscapes, and river systems, although the timing and nature of such changes remains disputed. We investigate the geochemistry and neodymium isotope character of Cenozoic mudstones spanning the breakup unconformity in the Western Foothills of Taiwan in order to constrain erosion and drainage development in southern China during the opening of the South China Sea. The La/Lu, Eu/Eu*, Th/Sc, Th/La, Cr/Th, and eNd values in these rocks show an abrupt change between 31 and 25 Ma. Generally the higher eNd values in sediments deposited prior to 31 Ma indicate erosion from Phanerozoic granitic sources exposed in coastal South China, whereas the lower eNd values suggest that the main sources had evolved to inland southern China by 25 Ma. The SHRIMP U-Pb ages of zircons from a tuff, together with biostratigraphy data constrain the breakup unconformity to be between 39 and 33 Ma, suggesting that the seafloor spreading in the South China Sea commenced before 33 Ma. This is significantly older than most of the oceanic crust preserved in the deeper part of the basin. Diachronous westward younging of the breakup unconformities and provenance changes of basins are consistent with seafloor spreading propagating from east to west. Initial spreading of the South China Sea prior to 33 Ma corresponds to tectonic adjustment in East Asia, including extrusion of the Indochina block and the rotation and eastward retreat of the subducting Pacific Plate.