System string encoding encodes your text according to the default text encoding configured on your machine.

On Windows machines, system string encoding uses the ANSI code page for the local machine. LabVIEW uses the following codepages for different languages:
Table 14. Code Pages for LabVIEW on Windows
Language Code Page
English, French, German 1252
Japanese 932 (Shift-JIS)
Korean 949 (Unified Hangul Code)
Chinese 936 (GB2312)

On Mac and Linux machines, UTF-8 is the default system encoding. There is minimal functional difference between setting your string Representation to System String Encoding or UTF-8 Encoding on Mac and Linux machines. However, using UTF-8 Encoding ensures your strings display correctly on different platforms and operating systems.