The system that spells Mandarin words with the Latin alphabet, as in “nǐ hǎo,” is Pinyin, formally Hanyu Pinyin.
Pinyin was developed in the People’s Republic of China during the 1950s and officially published in 1958. It represents the sounds of Standard Chinese and uses tone marks to show Mandarin’s four main tones plus the neutral tone. Thus, the marks in “nǐ hǎo” are part of the pronunciation guide, not decoration.
Pinyin is used to teach Mandarin pronunciation, help children learn reading, provide dictionary entries, and support computer input. It does not replace Chinese characters in ordinary written Chinese; rather, it is a romanization system that shows how characters are pronounced.
Hanzi means Chinese characters, while Zhuyin, or Bopomofo, is a different phonetic system based on specialized symbols. Wade–Giles is an older romanization system, which is why older spellings such as “Peking” may appear alongside modern Pinyin forms such as “Beijing.”