The Kindle 3 provides some support for display of non-Latin scripts. But the support is not perfect. For example, if you convert Chinese books in UTF-8 via calibre into mobi books for the Kindle, the default configuration will result in many characters showing up as little squares.
A solution is provided by user “hyraxer” at Kindle Boards:
click the home button
click the enter button
;debugOn (click enter button)
~changeLocale zh-CN (click enter button)
;debugOff (click enter button)
and then restart your kindle, everything will be OK.
I’ve tried it and it seems to work.