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Rendering Chinese languages in the Roman alphabet is a difficult problem, as Chinese uses a number of sounds not found in English or other European languages and vice versa. Several "romanization" systems have been developed that attempt to bridge the gap; the two most widely known are the Hanyu Pinyin (literally Chinese-language Spelled-sound) system developed in China in the 1950s and Wade-Giles, which was developed by two British diplomats at the end of the 19th century. To make things even more confusing, most place names in China were written by English-speakers using the Chinese Postal Map Romanization, which gave us the oddities of Peking for modern Beijing and Keelong for modern Jilong. The People's Republic of China declared that the Hanyu Pinyin system was the only acceptable system in 1979, changing the spelling of Chinese proper names when printed in other countries, hence this article's title: Mao Tse-tung became Mao Zedong.
The Tongyong Pinyin (lit. Universal/General Use Spelling Sounds) system was the official romanization system of the Republic Of China (Taiwan) from 2002 till 2008. Tongyong Pinyin was designed to be more intuitive for non-Chinese speakers. It was also claimed to be useful for romanizing non-Mandarin Chinese. Despite this, street signs in Taipei City generally use Hanyu Pinyin while other cities used Tongyong Pinyin. In addition, the Wade-Giles system is still widely used in some instances, such as place names and personal names, hence Taipei instead of Taibei. The ROC adopted the Hanyu Pinyin system in 2009.
According to The Other Wiki, these systems are transcriptions of Chinese rather than transliterations since Chinese writing is logographic, not alphabetic. (Chinese does have the native Zhuyin Fuhao phonemic alphabet, which Pinyin replaced.) That is, they attempt to map sounds to letters instead of characters to letters (as would be the case for, say, languages written using the Cyrillic alphabet). In the case of Pinyin, this mapping is done without following the usage of any other language that uses the Roman alphabet, which can result in confusion when read by those unfamiliar with Pinyin. For example, Q represents something like the '-ch' sound, as in the Qin and Qing Dynasties (though there is a distinction between the 'Q' and 'Ch' sounds, actually). Tones are represented by diacritic marks.
It may be tempting to view Pinyin (and other romanization systems) as a method to kludge the Chinese language onto a keyboard, but that is not the case. The Communist did plan to abolish hanzi altogether in 1950s and 1960s, but the development of Hanyu Pinyin was parallel to this.
This is also the reason why us older folks had trouble for a while with the city of Beijing. We wondered what this city was and why it had become the capital. Seems that Peking was renamed Beijing in English one day without any notice. Note to media, it's not a good idea to suddenly change the spelling of something without a lot of mentioning that you have done it. Even more confusingly, during the Chinese Civil War the Kuomintang actually did rename it to "Peiping" and the Taiwanese government still officially refers to it by that name - at a casual glance, if anything "Peiping" looks more like a re-spelling of Peking and "Beijing" looks like a totally different name, but it's the other way around.