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Think about it this way: surely you've read literature translated from another language? For example, Les Miserables, set in France. All characters speak French. Hugo doesn't need to tell you that ...
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#4: Attribution notice removed
Source: https://writers.stackexchange.com/a/33359 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#3: Attribution notice added
Source: https://writers.stackexchange.com/a/33359 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#2: Initial revision
Think about it this way: surely you've read literature translated from another language? For example, _Les Miserables_, set in France. All characters speak French. Hugo doesn't need to tell you that they speak French, or that no character knows a word of English - the setting does that. You might be reading in English, but you know it's not really English the characters are speaking. The way I usually think about it is this: the language the story is written in is transparent, "mother-tongue", "vanilla". Other languages are various flavours of "foreign", which I might be using in the story for various reasons. What happens when your in-story "foreign" is the language you're actually writing in (for example, your Chinese character comes to America)? You focus on how your POV character would see things. If he doesn't understand what's being said to him, you write "X said something I did not understand".