What is Chinese for "Set the priority straight" ?
Or is there any Chinese fable or ancient story that relates to the idea of setting the priority straight?
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I believe what you're looking for is 搞清楚狀況 (gǎo qīng chǔ zhuàng kuàng).
Which roughly means "Make oneself clear of the situation".
Please note that this phrase is not, strictly speaking, nice.
It somehow implies You know better than the listener (or whoever you're referring to), he/she is inferior to you and such.
And the worst of all, it has a little bit of meaning of "Know your place!".
So, depending on how you used "Set your priority straight!", this phrase could more or less means that.
If, say, an employee is slacking when there is obviously something in the tight schedule, the boss can definitely tell him "搞不清楚狀況呀你！？" (gǎo bù qīng chǔ zhuàng kuàng ya nǐ, Do you have any Fing idea what the situation is right now!? Set your priority straight!), and fire his/her ass!
Other uses of this phrase could be something like,
A smartass brat talking shit to a nice-but-hardcore gang member, then the gangster could surely say, "搞不清楚狀況呀你！？".
Then, in this case, it obviously means "Know your place! If you keep up, you will never see the light of day again!"
There are many other uses of this phrase, just as "Set your priority straight", it all depends on how and when you use it.