In Chinese, the speakability-readability problem is capable of various solutions depending on the audience for which the Pinyinized material is intended. A dilemma exists in the fact that the work of Pinyinization must be undertaken by people who are already literate—which means literate in characters—and Chinese literati, even of the newer generation, have displayed even less capacity than their Western counterparts to write in a style capable of ready comprehension by ordinary people.
Source: wiktionary
There are a couple of reasons for that. One is that official pinyinization only applies to PRC placenames. This lets out Taipei and, until recently, Hong Kong and Kowloon.
Source: wiktionary
Chinese doesn't have any capitals, so it really doesn't matter :-)
If you're talking Pinyinization, I guess the only capitals would be Ni and Zhongwen.
Source: wiktionary
His rationale was that pinyinization was necessary to reduce dialect-based identity and to unite the Chinese community.
Source: wiktionary
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