This paper deals with the technical difficulties and challenges encountered in carrying out an ongoing publicly-funded national research project entitled the Chinese Thought and Culture Translation and Communication Project, which aims at standardizing key concepts and terms in translating Chinese classical texts. The project was initiated to meet the needs of promoting equal dialogue and communication between the Chinese and western civilizations in an era that has seen an increasing demand from English readers for a better understanding of Chinese indigenous knowledge. The major part of the project deals with various fundamental issues in deciding the appropriate fi nal English translation in order to overcome both linguistic barriers and bridging the huge differences between the Chinese and western cultures. To achieve the goal, the following principles were established: the fi rst and foremost principle is the accurate understanding of the concepts, especially their connotations in thought and culture. Secondly, the concepts should be translated in relation to specifi c contexts. Thirdly, creative translation is encouraged, with due respect to existing translations by sinologists and specialists. Fourthly, phonetic transliteration is necessary and indispensable in the translation of concepts on which there are no English equivalents or semi-equivalents.