This workaround is very involved, but does work.1] In AutoCAD, explode the blocks which contain the TEXT entities, and save the file to a new name. The following steps which relate to converting the text to a usable format will not work if the annotation is in blocks.2] Run the Import from CAD Tool in ArcToolbox, to import point, polyline, polygon and multipatch entities to a CAD Staging geodatabase.3] After importing the features, in ArcCatalog, right click on the feature dataset containing the features, select Import > Feature Class (single), and import the annotation from the AutoCAD drawing file.The annotation will be converted to point features in the geodatabase feature dataset, and the TEXT entities will be saved as an attribute of the points.4] Add the point feature class to ArcMap, and label the points with the values in the RefName; Text, or TxtMemo fields. The Chinese characters are stored correctly in all these fields.5] Convert the labels to annotation in the geodatabase. The Chinese characters are preserved correctly in the new annotation feature class.