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The Chinese alphabet
The Chinese script isn't a phonetic alphabet but consists of characters which express the meaning of a word in a symbolic way that is independent from the pronunciation. Due to that cause transcriptions were made up to describe the pronunciation of the Chinese characters.
The pinyin- transcription
Today's official transcription of Chinese characters in the People's Republic. Based on mandarin, the established standard language in the PR.
Wade- Giles transcription
The Wade- Giles system was introduced in the mid- 19th century by Thomas Wade, modified by Herbert Giles and used in his "Chinese- English Dictionary" that dates back to 1921. The standard work "Matthew's Chinese- English Dictionary" which is still being used by students of classical Chinese also uses the Wade- Giles system of transcription.
Zhuyin - transcription
There also exists a system which is not based on the Roman alphabet but on the Japanese characters of the Hiragana and Katagana alphabet: the so-called Zhuyin- transcription. It was introduced in China in 1921 and is still being used on Taiwan.
Different transcription systems
Some German and French sinologists invented their own transcription systems which are used in text books or dictionaries. The different transcription systems lead to the fact that a student of modern Chinese usually has to master the pinyin transcription because it is used in text books from mainland China.
For the study of classical Chinese he also has to learn the Wade- Giles system in order to be able to use the standard dictionary the "Matthew's Chinese- English Dictionary". This confusion has consequences for any lay person who is interested in China: if he looks for a book on Daoism he also has to enter the search item "Taoism" to cover the whole range of books available.