The characters combine literally and powerfully: “Two (两) are defeated (败), both together (俱) are wounded (伤).” The meaning is transparent and direct, describing a scenario of complete and shared negative consequences.
The idiom 两败俱伤 is deeply rooted in a cultural preference for harmony (和谐, héxié) and the avoidance of direct, destructive confrontation. Chinese philosophy and strategic thinking, from Sun Tzu's “Art of War” to everyday negotiation, often emphasize finding a way to achieve goals without resorting to a brute-force conflict that harms everyone. This idiom serves as a potent cultural shorthand, a warning that unbridled aggression and a “win-at-all-costs” mentality are foolish and ultimately self-defeating. A useful Western comparison is the concept of a “Pyrrhic victory,” but they are not the same. A Pyrrhic victory is when you win the battle, but your losses are so devastating that it feels like a defeat. 两败俱伤 is different and more specific: it asserts that both sides are defeated. There is no winner, not even a heavily wounded one. It is a pure “lose-lose” scenario, closer in spirit to the concept of “Mutually Assured Destruction” (M.A.D.) but applied to conventional conflicts, business rivalries, or even bitter family disputes.
两败俱伤 is a formal idiom but is widely understood and used in various modern contexts to describe and warn against negative-sum games.
The connotation is consistently negative and cautionary. It's a statement of fact about a bad outcome or a warning to prevent one.