What happens in John Searle’s Chinese room thought experiment?

In his Chinese room argument, the American philosopher John Searle presents a thought experiment designed to challenge the claims of "strong artificial intelligence."12

The experiment asks you to imagine a person who knows no Chinese sitting alone in a room. Inside are boxes of Chinese characters and a manual that provides rules for matching input strings of characters with appropriate output responses. When a Chinese speaker outside the room slides a question through a slot, the person inside uses the manual to manipulate the symbols and produce a reply, which is then passed back out.123

To the person outside, the room appears to understand Chinese and passes the Turing test. However, Searle argues that the person inside the room is merely performing symbol manipulation based on formal rules without understanding the meaning of the characters. Consequently, Searle concludes that computers, which function similarly by processing symbols, simulate intelligence but do not possess genuine understanding or thought.132