The specific reference is to the essay "The Analytical Language of John Wilkins", in which Borges likens an taxonomy proposed by Wilkins to a (almost certainly fictitious) Chinese encyclopedia which groups animals into fourteen categories:
> (a) those that belong to the Emperor, (b) embalmed ones, (c) those that are trained, (d) suckling pigs, (e) mermaids, (f) fabulous ones, (g) stray dogs, (h) those that are included in the present classification, (i) those that tremble as if they are mad, (j) innumerable ones, (k) those drawn with a very fine camelhair brush, (l) others, (m) those that have just broken a flower vase, (n) those that look like flies from a long way off.
> (a) those that belong to the Emperor, (b) embalmed ones, (c) those that are trained, (d) suckling pigs, (e) mermaids, (f) fabulous ones, (g) stray dogs, (h) those that are included in the present classification, (i) those that tremble as if they are mad, (j) innumerable ones, (k) those drawn with a very fine camelhair brush, (l) others, (m) those that have just broken a flower vase, (n) those that look like flies from a long way off.