For Sony prs500, by tuning around with the font set and converting to LRF format in Calibre, I found it was pleasant to read Chinese on it. If you don't mind a little bit messy format, by this I mean stuff like uneven line break etc., it works flawlessly. Features include adjustable font size (S,M,L), bookmarks, portrait and landscape reading.... I am sure PRS505 may do a even better job.
Popular readers like Kindle and Sony ebook reader, they both have extensive community support in Chinese. So, you really can't go wrong with either of them.
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