Much research has been done addressing the issue of language and dialect and has attracted much interest in the Sinophone world. In this paper, the issue is approached from the perspective of Speech Community Theory (SCT) with discussion of the identification of Chinese varieties. There are mainly two approaches in previous research: linguistic and sociolinguistic. In the linguistic approach, the classification of languages and dialects is through comparison of linguistic descriptions and intelligibility. In the sociolinguistic approach, actual language use and attitudes of the speakers are investigated and ethnic and political factors are considered. The two approaches tend to result in different classifications. The purely linguistic classification tends to be narrower than the classification invoking attitudinal, cultural and political factors, resulting in a larger number of languages than the sociolinguistic approach. The different approaches are traced to divergent understandings of what a language is. A language is often understood purely as a tool of communication or, alternatively, it is regarded primarily as an identity device. Applying SCT, this paper analyzes the connection between communication and identity formation, taking the example of Cantonese speakers. That case shows a correlation of linguistic contact with linguistic identity among native speakers. Consequently, the relevance of cultural and socio-political factors is explained through their impact on communication rather than directly on a linguistic identity.