How to resolve...
When I had a similar issue I firstly displayed the encoding of my text in php using
echo mb_detect_encoding ( $text );
It shows the encoding of the text coming from my query. This showed me that I was getting ASCII from mysql_query when Chinese or Russian characters were in my database.
The change I made was with the following addition after the mysql_connect
mysql_set_charset('UTF8');
My database is utf8_unicode_ci collation and I can see chinese characters.
So, if mb_detect_encoding is now giving you UTF8 for your text then you would be able to show chinese characters.
The next step is to make sure what you pass to the browser has the correct header...
header('Content-Type: text/html; charset=UTF-8');
Put the above at the top of your code in php to make sure the browser is expecting your encoding.
Now that should the question, however ideally you should be using PDO or mysqli rather than mysql_connect method. In this case the equivalent procedural style commands are..
$link = mysqli_connect('localhost', 'my_user', 'my_password', 'test');
mysqli_set_charset($link, "utf8");
Where $link is the equivalent to your connection to the database.