Chinese Simplified and Chinese Traditional not selectable as languages in the GUI and mkvmerge
The problem
The GUI's language drop down boxes do contain »Chinese«, but neither »Chinese (Simplified)« nor »Chinese (Traditional)« can be found. Why?
Reason
The Matroska file format uses ISO 639-2:1998 language codes for marking the language of tracks, chapter atoms and other entities. This standard contains quite a number of languages, but for several languages it only contains their family instead of the actual members. Therefore the list of ISO 639-2 languages contains »Chinese« but neither »Chinese (Simplified)« nor »Chinese (Traditional)«. And this is the reason why you cannot select those in the GUI or mkvmerge either.
Back when the Matroska file format was specified ISO 639-2 was the ISO standard covering the most known languages which is why it was chosen in the first place. Nowadays there are newer standards like ISO 639-3:2007 covering a much wider range of languages. But as there are millions of devices out there already implementing the current Matroska specifications we cannot simply switch over to this standard.
Recent improvements in Matroska
Recently the Matroska format was extended by the introduction of the LanguageIETF and ChapLanguageIETF elements. These allow specifying languages in much greater detail, following the IETF BCP47 standard. With those elements specifying things such as "German spoken in Switzerland" and much more complicated schemes will be possible.
Starting with v50 MKVToolNix supports those elements. See the FAQ entry about Languages in Matroska and MKVToolNix for an in-depth discussion of that feature.