On-Cho Ng’s “Chinese Philosophy, Hermeneutics, and Onto-Hermeneutics" make it even clearer on the relation of these two traditions.
Here are a few quotations:
“Our conscious (historically mediated) living and experiencing of tradition enables and yields the fusion of horizons. The ontological interpenetration of tradition and individual historical particularities is the very condition of our understanding." (376, see also Gadamer, Truth and Method, 306)"
“By contrast, the Yijing (Book of Changes) depicts a rational, and rationally conceived, holistic universe of vitality, creativity, and harmony through the sixty-four hexagrams. The hexagram of guan is ‘comprensive observation’ by virtue of the human ability of understanding, which, however, is not the cool dissection of reality as the object, as guan involves feeling for and response (ganying) to heaven, earth, and humanity. The hexagram qian is at once the beginning of reality and the knowledge of trhat beginning. In realizing oneself, one also observes and understands the cosmos. To put it another way, knowledge is not merely probing knowledge for knowledge’s sake, because after all, onto-cosmological being is at once epistemological and experiential becoming.
This ontology on oneness is similarly exemplified by the Confucian dao (Way), whose ultimacy rests on its rationality and encasement in the classics. To learn and to follow the dao is to realize the moral and ritual order established by the ancient sages. The truths of the Way are reasonable, as the Way is the aggregate of names (ming) that must be rectified by realizing our selves and our relationships with others and society. To the extent that the dao, the cultural aggregate of the sages’s teachings, is the ground for norms and values, its apprehension is not a purely epistemological process but rather the judicious effort of reasonably applying the correct means to come to grips with particular circumstances–the ontological conflation of epistemological exercise and experiential exertion." (378)
We could put it in this way, that understanding oneself, to be able to use the tradition to describe one’s existence is the rectification of names, as it says above, “names" “must be rectified by realizing our selves and our relationships with others and society.
“Gadamer’s hermeneutic ontology pertains to the meta-method of reading.
Thus, Gadamerian hermeneutics does not share the Confucian hermeneutical goal of realizing the Way by apprehending the values of the classics via moral action. Confucian hermeneutics is philosohical in the ontological sense. Knowing the good in the abstract has no meaning and purpose unless it eventuates in parxis. Insofar as truth precedes and envelops method, Confucian hermeneutics is best described as onto-hermeneutics, whose tenets and approaches provide the essential components for the formulation of a contemporary philosophy of understanding, one that complements the Western philosophical hermeneutics as it seeks to complement epistemological and rational method with ontological plenitude." (379)