When writing in English about Chinese ideas and works, one of the difficult realities is related to engaging and citing those sources. Most of what comes below is found in the relevant sections of the 17th edition of the Chicago Manual of Style (CMOS17).
Pinyin vs. P‘in-in
The general guidance found in New Hart’s Rules and the Chicago Manual of Style is to romanise based on pinyin without tone marks. Pinyin, of course, comes from the Beijing form of Mandarin. However, it is perfectly acceptable to use use alternative romanisation systems—such as Yale Cantonese for studies on Hong Kong or Wade-Giles when discussing historic missionary writings. It is often the case that alternatives in romanisation are provided in parentheses. I often do this with names, where an author may have historically used a particular form which I try to preserve, followed in pinyin for those who are not familiar with their romanised name, such as K. H. Ting (Ding Guangxun)—I prefer to prioritise what people have chosen for themselves before going with standards.
Whatever romanisation system you choose, it should be consistent and made explicit in a footnote or somewhere in the Introduction of the text. For further details, see CMOS17 §11.82, §11.83, and §11.84.
Proper Names and Capitalisation
How do you deal with Chinese names? Generally speaking, if you are using pinyin, it is designed for Chinese speakers in mind and, therefore, should always list the surname first and without a comma. This also means that, in a bibliography, if you were to list items with surname first, you should not use a comma to separate the pinyin surname from the proper name.
As Chinese characters do not have a concept of capitalisation, this should generally follows the English practice: only capitalise the first letter of the first word of a sentence and any proper nouns. So if you are discussing a term in-line, you may speak about dao (道) or Zhongguo (中國), Aidingbao (愛丁堡), Mao Zedong (毛澤東), or Beijing (北京)—the last two, as proper nouns accepted in the English language, are not italicised. However, if you are transliterating a sentence or the title of a book, it should all be sentence case, such as with Mao Zedong wenji (毛澤東文集).
Citing Chinese Works
One of the final major hurdles is what to do with the actual citations of Chinese works. If a work is written in English, at minimum, it should include romanisation and English translation for every major part of the work. Whether you include Chinese characters or not is often a matter of personal preference. My own practice is to not include Chinese characters (unless absolutely necessary to make a point) in the main text or footnotes, but include Chinese characters in the full bibliography. This is mainly to make it easier to read for English readers but still allow a source to be found for Chinese readers. Furthermore, I would keep everything in traditional Chinese characters for consistency sake. For instance:
Liu Xiaofeng 劉小楓. Zhengjiu yu xiaoyao: Zhongxifang shiren dui shijie de butong taidu 拯救與逍遙 : 中西方詩人對世界的不同態度 [Delivering and Dallying: Different Attitudes of the World by Chinese and Western Poets]. Shanghai: Shanghai People’s Publishing House, 1988.