The encoding variable in .mailrc does not affect Mailer behavior, but it does set mailx function. To send e-mail in formats other than 7-bit ASCII, such as (8-bit) Traditional Chinese characters, you must use /usr/SUNWale/bin/mailx. The encoding variable in .mailrc sets encoding formats for mailx.
International transmission conventions require that header information use only ASCII characters. So Traditional Chinese characters should not be used in the header (including the Subject line) with Mailer or with mailx.
The /bin/mailx application has not been localized and cannot send or receive Traditional Chinese characters.