Block low until you see his u3, which comes pretty slow. You should fuzzy guard the overhead that comes after the b3. Also, wether you believe it or not, Quan Chi is one of those characters you wanna oblige to do a wake up attack, since he has no viable options. Even if he teleports next to you, you're at advantage, so you can f4,3,4 him into combo of your choice. If his trance misses, you're at advantage. All you really have to do is concentrate and focus on what mixup is he gonna use next.