How to make xterm display Chinese characters? It just displays some small rectangles for Chinese characters.
First, the settings for some old X programs like xterm is in ~/.Xresources. And it takes effect after the X server restarts, or you can manually load the settings by
xrdb -merge ~/.Xresources
Second, the Chinese or similar fonts displaying not well is usually caused by wrong fonts which do not have Chinese or similar characters. The fonts used for these characters can be set for xterm by setting XTerm*faceNameDoublesize.
For a complete configuration in my ~/.Xresource file for xterm, please check my configuration file.