Firstly, Unicode is possible in Basis 6.20/6.40 enviroment.
If you do not have any plan to conver the system to Unicode recently, you need to use codepage 8400(for Simplified Chinese) in the system. Codepage 8400 is based on GB2312, and as you may know, this character set does not support all of the Chinese characters.
About language package, pls check sap note 330104, here you can find the language CD for your product.
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