When you first start to learn Chinese, you have the sense that every character has a meaning.  For example, 东 means east and 西 means west.  Easy!!  Then you come across 东西 which means “things” or “stuff” and have to figure out how the combination of “east” and “west” can mean “stuff”.

Its better to think of Chinese characters as sound units which generally correspond to a morpheme – a sub-meaning unit.    An example in English would be the “bi” in bicycle, biplane, and bilateral.   The “bi” would be written with one character in Chinese.  Of course, “buy” as in buyer has the same sound, but different meaning and so the sound would be written with a different character in those words.

Additionally, Chinese often build words using ellipsis  from longer phrases and also from entire stories in the case of Chinese idioms. For example – Beijing University – 北京大学 – may be simplified using ellipsis to 北大.  This will lead character dictionaries to say that 北 has “beijing” as one of its meaning senses in addition to the common  meaning “north”

Also, several characters may be put together to represent a foreign word phonetically.  In this case the characters have no real meaning (but often, especially in the business context, they may try to pick characters whose meanings do reflect something about the business)

A good example of the latter is 家乐福 – the Chinese name for the French company Carrefour.  “Jia Le Fu” is a reasonable translitteration of the sound of the French name.  But the sense of the characters “home happy fortune” also gives the name a positive sense.

In summary, its useful to get a sense of a Chinese character’s general sense as it will be helpful to guess the meaning of previously unseen combinations of the character.  Just remember that characters are most often not words.