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This thread is resolved. Here is a description of the problem and solution.
Problem:Chinese Flag no longer displays
Solution:Deactivate WPML plugin, delete it , go to https://wpml.org/account/downloads/ and download a fresh version of WPML 4.0.8 and install it manually
to do a manual update please follow these steps:
1. Backup your database – see for example: http://wordpress.org/extend/plugins/wp-db-backup/
2. Deactivate the existing WPML plugin and add-ons.
3. Delete the plugin files – this does not delete your translations. You will simply delete the plugin files from you "wp-content/plugins" folder NOT the database records.
4. Download the updated plugins from our servers and upload them to the plugin directory.
5. Activate the WPML plugin and add-ons.