The problem stems from the Contact Manager. You'll need to change the settings from there.
1) Make sure you're running ContactManager V2.4.321+. If not, you can update it by opening the Contacts app and then going to Settings - About and hitting Upgrade.
2) Now go to 'More features and settings' from the menu button. Select 'Location', then deselect 'Show operator information' and 'Display number's location'.
Your contacts should now show up without any Chinese characters.