Chinese traditional characters are used in 'island' China - namely Taiwan, Singapore, Hong Kong and parts of the south. The characters are used here for both mandarin and cantonese.

Simplified characters are the most important for mainland China - and were brought in in the late 50s to improve Chinese literacy - although they actually caused some confusion in the early days.

Today mandarin and simplified is the most important combination to target.

Anyone any further comments on that?

Simplified Chinese are simplified from traditional Chinese by People’s Republic of China in an attemplt to promote literacy. It is used in mainland China, Singapore, and Malaysia.

Traditional Characters are used in Hong Kong, Macau, Taiwan, and many overseas Chinese communities, but simplified characters are gradually gaining popularity among overseas Chinese as more mainland Chinese emigrate from their home land.

In addition, although in Hong Kong, traditional Chinese characters are officially and customarily used, but the increasing influence of mainland China on Hong Kong has boosted the use of simplified characters. With the growing influence of Mainland China, simplified Chinese characters often appear in tourist areas. Bookshops selling publications in simplified Chinese characters are becoming popular, because these mainland editions are often cheaper.

However textbooks, official statements, newspapers, including the PRC-funded media, show no signs of moving to simplified Chinese characters.
It is common for Hong Kong people to learn both sets of characters. For use on computers, however, people tend to type Chinese characters using a traditional character set like Big5, but if needed, encode it later into simplified Chinese using available conversion software. In Hong Kong as well as elsewhere, it is common for people who use both sets to do so because it is much easier to convert from the traditional character set to the simplified character set because of the usage of the aforementioned methods 8 and 9 of simplification.

In Taiwan, Simplified Chinese characters are not officially used in governmental and civil publications. However, it is legal to import simplified character publications and distribute them.
Simplified character forms are created by decreasing the number of strokes and simplifying the forms of a sizeable proportion of traditional Chinese characters.

Mandarin is the official spoken language of the China, Taiwan, and Singapore.

Although there are various dialects in China, with the government encouragement of the mandarin speaking and growing penetration rate of the simplified Chinese Usage, it could be said that mandarin and simplified Chinese are the most important combination to target.

Reference: http://en.wikipedia.org/wiki/Simplified_Chinese

From SEO perspective, importance depends on who is your target. China is too big, and Chinese words are varied from location to location. For example, in mainland China, they use the terms "home loan". In Hong Kong, they use "mortgage". For many Chinese terms, Southern China is different with Northen China.

Amy's summary is very good. I would only add that Traditional Chinese is also used widely in the overseas Chinese communities throughout the world, an often overlooked market. I've also been told by my business partner (who knows more about these things) that there is a revival of Traditional Chinese within the People's Republic.

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