Nietzsche lived at a time when little was known about Chinese thought. Because Indian thought has common origins with classical Greek philosophy, Schopenhauer had used it in his critique of Christianity, but he had misunderstood Hinduism and Buddhism. He saw them as profoundly nihilistic philosophies, and misled Nietzche, whose philosophical thinking he had inspired. Shang also says that in Nietzsche’s only mention of the Chinese tradition, he refers to it as an “Oriental example of the overall decadence of the human race (A, 32; WP, 129).” This, therefore, rules out any influence Zhuangzi could have had on Nietzsche.

Shang writes: “Both Zhuangzi and Nietzsche concluded that there is no way to reach reality through common language, invented as it is by human consciousness and human appropriation. Words are signs that can only signify partial traits of the signified … For instance, the word “horse” is not “the proper representation of the thing we called “horse” in-itself … When “we begin to define what “horse” is with many different definitions, and every definition we give simply puts one more layer, one more sign to the original one … Language could never lead one to the truth or Dao; instead, it could trap us in an infinite game of language. This is exactly what Nietzsche called “the seduction of words” (Beyond Good and Evil, 20). People could hardly resist such seduction, driven by their desire for appropriation, their “will to power” and their fixed mind (chengxin) … Serious disasters result from the serious pursuit for truth, which is indeed an empty word, a humanly fabricated sign or metaphor.” For Zhuangzi, “the problem with language here is that words fragment and differentiate the unity of nature (Dao).” In the Qi Wu-lun Zhuangzi shows how language leads to endless disputations as each side asserts that it is right and the other side is wrong. But, Zhuangzi says: ’Right’ is an infinity, ‘wrong’ is an infinity as well.” Because there is no difference between the two, they are all just words and form only opinions, so why should we cling to them? “Therefore better be enlightened” (ibid.). “Be enlightened” (yiming, 以明) means to realize the limitation of language, to overcome the fixation of words, letting nature shine by its own light and appearance through our mind.”
For Nietzsche also, Shang continues, “words are signs and metaphors that we invented to express those things we don’t know … We cannot stand the world of appearances and becoming as will to power, so we bury our head in the sand of language to imagine another world of stability, certainty and security … For Nietzsche, if we cannot break through the problem of language we will never be able to overcome metaphysics and the ascetic will to truth.”
Now, not only both Zhuangzi and Nietzsche shared the same distrust in language, but both also tried to “overcome the limitation and fixation of language by using language …In the words of Nietzche, they used language “to imitate the world with paradoxical and contradictory language”

As explained on the page titled “Zhuangzi’s Goblet Words,” Zhuangzi used goblet words (zhiyan), which include allegories, aphorisms, anecdotes, dialogues, and poems, while, in Thus Spoke Zarathustra Nietzsche used what he calls “Dionysian dithyramb.”: “In every word he contradicts, this most Yes-saying of all spirits; in him all opposites are blended into a new unity (Ecce Homo, ‘Z’, 6)” adding “I am the inventor of the dithyramb” (ibid., 7), which originated from the Greek choral hymn for Dionysus. Now language speaks dithyrambically: ‘Epigrams trembling with passion, eloquence become music, lightning bolts hurled forward into hitherto unfathomed futures. The most powerful capacity for metaphor that has existed so far is poor and mere child’s play compared with this return of language to the nature of imagery” (ibid., 6).
Shang points out that “Zhuangzi would use another metaphor for such Dionysian dithyramb or music—tianlai, or the sound of heaven.” At the beginning of chapter 2 Qi wu-lun, “Tzu ch’i of Nan-kao reclined elbow on armrest, looked up at the sky and exhaled, in a trance as though he had lost the counterpart of himself … This time I had lost my own self, did you know it. You hear the pipes of men, don’t you, but not yet the pipes of earth, the pipes of earth but not yet the pipes of heaven? Shang comments: “Beyond the sounds of man and earth, which are played accordingly by either their determined instrument or their fixed shape, the sound of heaven plays without a fixed mind or premeditated ‘goal’. It simply is ‘blowing on the ten thousand differences, letting go all by itself spontaneously, making different sounds naturally without obeying any ruler. Language thus liberates itself from the fixation of designation or signified (truth), from the battlefield of ‘rights’ and ‘wrongs’, and becomes the wind of nature (tianlai)orDionysian dithyramb from which “we hear nothing but the accents of an exuberant, triumphant life in which all things, whether good or evil, are deified” (The Birth of Tragedy, 3). A language beyond itself, ‘the language without words’ now comes into play and opens up as well infinite space for free dancing and wandering.”
Source:
Ge Ling Shang – Liberation as Affirmation: The Religiosity of Zhuangzi and Nietzsche (2006)
