The battle mechanics are briefly explained, but I'll summarize.
There are 4 options for battle. Every 5 seconds after switching, you can switch to another. Offense boosts damage but you take more. Defense boosts defense and lowers damage. Evasion swaps your qi for damage and allows countering, while Balance allows you to recover small amounts of qi.
Before you get into a fight, you need to improve your stats t hrough talent points as suggested by Mai (first when you speak to her and then again before you embark and she gives you healing items).
Unless you do this, you won't stand much of a chance so be sure to invest some time in building your stats. Hope that helps.
Here's a list of features ( https://www.patreon.com/posts/55903032 )
I'll add battle mechanics to the list so that it's less of a mystery.