Advances in language engineering may be dependent on theoretical principles originating from linguistics, since both share a common object of enquiry, natural language structures. We outline an approach to term extraction that rests on theoretical claims about the structure of words. We use the structural properties of compound words to specifically elicit the sets of terms defined by type hierarchies such as hyponymy and meronymy. The theoretical claims revolve around the head-modifier principle, which determines the formation of a major class of compounds. Significantly it has been suggested that the principle operates in languages other than English. To demonstrate the extendibility of our approach beyond English, we present a case study of term extraction in Chinese, a language whose written form is the vehicle of communication for over 1.3 billion language users, and therefore has great significance for the development of language engineering technologies.