The discussions in this thread are related to Wordsmith 4, but version 3.
With version 3, as long as your Chinese data are tokenised, there is no need to convert to Unicode - By the way, if you use "save as" and select "Unicode document" in Notepad, it is Unicode (UTF-16). But you do need a simplied Chinese version of Windows or a language pack. Still only Concord will work, but not Wordlist or Keyword.
In Wordsmith 4, you must convert Chinese data into Unicode (you can use the Text Converter in Utilities of WS4). In this case, even texts not tokenised will work with Concord. But the data must be tokenised if you want to make a wordlist or extract keywords.