The Chinese word "苏珊" is formed through phonetic transliteration, where characters are selected based on their sound to approximate the pronunciation of the foreign name "Susan". The character "苏" (sū) captures the "Su" sound, while "珊" (shān) represents the "san" sound, together creating a close auditory match without regard to the original meanings of the characters. This method is commonly used in Chinese to adapt foreign names into written form.