Most Chinese words are formed out of native Chinese morphemes, including words describing imported objects and ideas. However, direct phonetic borrowing of foreign words has gone on since ancient times. Words borrowed from along the Silk Road in ancient times include 葡萄 "grape," 石榴 "pomegranate" and 狮子/獅子 "lion." Some words were borrowed from Buddhist scriptures, including 佛 "Buddha" and 菩萨/菩薩 "bodhisattva." Other words came from nomadic peoples to the north, such as 哥哥 "older brother" and 胡同 "hutong." Words borrowed from the peoples along the Silk Road, such as 葡萄 "grape" (pútáo in Mandarin), generally have Iranian etymologies. Buddhist terminology is generally derived from Sanskrit or Pāli, the liturgical languages of North India. Words borrowed from the nomadic peoples of the northern regions generally have Altaic etymologies, but from exactly which Altaic source is not always entirely clear.
Foreign words continue to enter the Chinese language by transcription according to their pronunciations. This is done by employing Chinese characters with similar pronunciations; characters in this case are usually taken strictly for their phonetic values. For example, "Israel" becomes 以色列 (pinyin: yǐsèliè). The Chinese characters used here literally mean "using-colour-rank," or "ranking using colour," but the sense is automatically ignored because it is understood that the characters are used for their phonetic values only. Characters which are used nearly exclusively in the transcription of foreign words are present in Chinese; many of these characters date back to Middle Chinese when they were used to translate Sanskrit phonemes. For example, 斯 sī and 尔/爾 ěr, which are Classical Chinese words for "thus" and "you," are never used in their original senses (except in a limited number of idiomatic expressions) and more often used to transcribe the sounds /s/ and /l/ in foreign words. Nevertheless, this method tends to yield somewhat strange results, and is therefore overwhelmingly used to transcribe foreign names only. A rather small number of direct phonetic borrowings have survived as common words, including 沙發 shāfā "sofa," 马达/馬達 mǎdá "motor," 幽默 yōumò "humour," 逻辑/邏輯 luójí "logic," 时髦/時髦 shímáo "smart, fashionable," 麦克风/麥克風 màikèfēng "microphone," and 歇斯底里 xiēsīdǐlǐ "hysterics." The bulk of these words were originally coined in the Shanghainese dialect during the early 20th century and were later loaned into Mandarin, hence their pronunciations in Mandarin are quite off from the English. For example, 沙发/沙發 and 马达/馬達 in Shanghainese actually sound like English "sofa" and "motor."
Today, it is much more common to use existing Chinese morphemes to coin new words in order to represent imported concepts, such as technical expressions. Any Latin or Greek etymologies are dropped, making them more comprehensible for Chinese but introducing more difficulties in understanding foreign texts. For example, the word telephone was loaned phonetically as 德律风/德律風 (Shanghainese: télífon [təlɪfoŋ], Standard Mandarin: délǜfēng) during the 1920s and widely used in Shanghai, but later the Japanese 电话/電話 (diànhuà "electric speech"), built out of native Chinese morphemes, became prevalent. Other examples include 电视/電視 (diànshì "electric vision") for television, 电脑/電腦 (diànnǎo "electric brain") for computer; 手机/手機 (shǒujī "hand machine") for cellphone, and 蓝牙/藍牙 (lányá "blue tooth") for Bluetooth. Occasionally half-transliteration, half-translation compromises are accepted, such as 汉堡包/漢堡包 (hànbǎo bāo, "Hamburg bun") for hamburger. Sometimes translations are designed so that they sound like the original while incorporating Chinese morphemes, such as 拖拉机/拖拉機 (tuōlājī, "tractor," literally "dragging-pulling machine"). This is often done for commercial purposes, for example 奔腾/奔騰 (bēnténg "running leaping") for Pentium and 赛百味/賽百味 (Sàibǎiwèi "better-than hundred tastes") for Subway restaurants.Another important source came from a related writing system, kanji, which are Chinese characters used in the Japanese language. The Japanese used kanji to translate many European words in the late 19th century and early 20th century. These words are called wasei-kango in Japanese (和製漢語 literally Japanese-made Chinese), and many of these Japanese words were then loaned into Chinese. Examples include diànhuà (電話, denwa, "telephone"), shèhuì (社会, shakai, "society"), kēxué (科學, kagaku, "science"), zhéxué (哲學, tetsugaku, "philosophy"), chōuxiàng (抽象, chūshō, "abstract"), zhǔyì (主義, shugi, "-ism" or "ideology") and làngmàn (浪漫, roman or rōman, French "roman"). Other terms were coined by the Japanese by giving new senses to existing Chinese terms or by referring to expressions used in classical Chinese literature, these include jīngjì (經濟, keizai) which in the original Chinese meant "the workings of the state" but in Japanese was narrowed to "economy," this narrowed definition was then reimported into Chinese. As a result, these terms are virtually indistinguishable from native Chinese words: indeed, there is dispute over some of these terms as to whether the Japanese or Chinese coined them first. As a result of this to-and-fro process, Chinese, Korean, Japanese, and Vietnamese continue to share many terms describing modern terminology, in parallel to a similar corpus of terms built from Greco-Latin terms shared among European languages.