When China’s economy gradually opened in the 1980s, the renminbi was devalued in order to improve the competitiveness of Chinese exports. Thus, the official exchange rate increased from ¥1.50 in 1980 to ¥8.62 by 1994 (the lowest rate on record). Improving current account balance during the latter half of the 1990s enabled the Chinese government to maintain a peg of ¥8.27 per US$1 from 1997 to 2005. As of 2019, renminbi banknotes are available in denominations from ¥0.1, ¥0.5 (1 and 5 jiao), ¥1, ¥5, ¥10, ¥20, ¥50 and ¥100. These denominations have been available since 1955, except for the ¥20 notes (added in 1999 with the fifth series) ¥50 and ¥100 notes (added in 1987 with the fourth series).

1. The Chinese character 圓 is also used to denote the base unit of the Hong Kong dollar, the Macanese pataca, and the New Taiwan dollar.
2. The number of banks issuing paper money increased after the revolution.
3. The word renminbi came into use the same year the People’s Republic of China was founded, in 1949.
4. These, known as “gold yuan notes”, circulated as normal currency in the 1940s alongside the yuan.
5. When shopping in China, a storekeeper might also express prices in terms of kuai, which translates into “pieces,” and is similar to how Americans use “bucks” to mean dollars.

The Brookings Institution is a nonprofit organization based in Washington, D.C. Our mission is to conduct in-depth, nonpartisan research to improve policy and governance at local, national, and global levels. The Korean won (won) used to be written with the hanja (Chinese) character 圜 from 1902 to 1910, and 圓 some time after World War II. It is now written exclusively in Hangul, as 원, in both North and South Korea. The character 圆 (yuán) is a variant of 元 (yuán) and the two share the same pronunciation. As for the 壹 (yī),  it is just another, more complicated form of 一 (yī) that is used by bankers in China as an anti-fraud measure since it is harder to alter than the simple 一 (yī). Unfortunately, however, neither the word “yuan” nor the word “renminbi” is commonly used in China.

Central Bank Rates

Issuance of the aluminium ¥0.01 and ¥0.02 coins ceased in 1991, with that of the ¥0.05 halting in 1994. The small coins were still struck for annual uncirculated mint sets in limited quantities, and from the beginning of 2005, the ¥0.01 coin got a new lease on life by being issued again every year since then up to present. In 1953, aluminium ¥0.01, ¥0.02, and ¥0.05 coins began being struck for circulation, and were first introduced in 1955. These depict the national emblem on the obverse (front) and the name and denomination framed by wheat stalks on the reverse (back).

If you find the difference between currency and units confusing, it might seem like a good idea to figure out which word for money is most popular in China and use that one. There is, in fact, very little practical difference between the terms RMB (renminbi) and CNY (Chinese yuan), and you will often hear these two words used interchangeably. Confusingly, however, it’s possible that you may also have heard Chinese money referred to as “yuan” (元 yuán), commonly abbreviated as CNY (“Chinese Yuan”).

What is the name of the Chinese currency?

It also distinguished the new administration from the previous government, whose policies had led to high levels of hyperinflation. In 1955, the RMB was revalued at a rate of 10,000 to one, meaning that each yuan in the new series replaced 10,000 old yuan. During the Chinese Civil War, the communist party established the People’s Bank of China and issued the first renminbi notes in December 1948, about a year before it defeated the Kuomintang government.

Instead, it is managed through a floating exchange rate, which means it is allowed to float in a narrow margin around a fixed base rate determined with reference to a basket of world currencies. China’s central bank devalued its currency last week, sending major stock markets in Asia and Europe down, and sparking fears of additional exchange rate devaluations in other countries. When reading news and analysis of this event, you might see both terms—“renminbi” and “yuan”—used interchangeably. The renminbi is the official currency of the People’s Republic of China, and translates to “people’s money.” Its international symbol is CNY (or CNH in Hong Kong; but abbreviated RMB, with the symbol ¥). The earliest issues were silver coins produced at the Guangdong mint, known in the West at the time as Canton, and transliterated as Kwangtung, in denominations of 5 cents, 1, 2 and 5 jiao and 1 yuan. Other regional mints were opened in the 1890s producing similar silver coins along with copper coins in denominations of 1, 2, 5, 10 and 20 cash.[4] The central government began issuing its own coins in the yuan currency system in 1903.

The Sichuan-Shaanxi Soviet issued copper 200 and 500 wen and silver 1 yuan coins. The yuan was derived from the Spanish dollar or Mexican dollar, worth eight Spanish reales and popularly known as the piece-of-eight. This was effectively the world’s first international currency, beginning to circulate widely in east and southeast Asia in the late 18th century due to Spanish https://www.tradebot.online/ presence in the region, principally the Philippines and Guam. Chinese paper money comes in denominations of one, five, ten, twenty, fifty and one hundred. China has the world’s second largest economy and Chinese money plays an increasingly important role in global financial transactions. That said, there’s still a great deal of confusion when it comes to Chinese currency.

This stringent management of the currency leads to a bottled-up demand for exchange in both directions. It is viewed as a major tool to keep the currency peg, preventing inflows of “hot money”. As of 2013, the renminbi is convertible on current accounts but not capital accounts. The ultimate goal has been to make the renminbi fully convertible. In 1946, a new currency was introduced for circulation there, replacing the Japanese issued Taiwan yen, the Old Taiwan dollar.

The People’s Bank of China has exclusive authority to issue currency. The reverse side of most coins, which range in denominations from 1 fen to 1 renminbi, contains images of historic buildings and the country’s diverse landscape. In November 1993, the Third Plenum of the Fourteenth CPC Central Committee approved a comprehensive reform strategy in which foreign exchange management reforms were highlighted as a key element for a market-oriented economy.

International role of the renminbi

The People’s Bank of China lowered the renminbi’s daily fix to the US dollar by 1.9 per cent to ¥6.2298 on 11 August 2015. The People’s Bank of China again lowered the renminbi’s daily fix to the US dollar from ¥6.620 to ¥6.6375 after Brexit on 27 June 2016. An orange polymer note, commemorating the new millennium was issued in 2000 with a face value of ¥100. This features a dragon on the obverse and the reverse features the China Millennium monument (at the Center for Cultural and Scientific Fairs). In 1999, a commemorative red ¥50 note was issued in honour of the 50th anniversary of the establishment of the People’s Republic of China. This note features Chinese Communist Party chairman Mao Zedong on the front and various animals on the back.

Internationalisation

The yuan is abbreviated as CNY while the renminbi is abbreviated as RMB. The latter was introduced to the country by the Communist People’s Republic of China at the time of its founding in 1949. Banknote printing facilities are based in Beijing, Shanghai, Chengdu, Xi’an, Shijiazhuang, and Nanchang. Also, high grade paper for the banknotes is produced at two facilities in Baoding and Kunshan.

Use as a currency outside mainland China

The term renminbi, on the other hand, is the official name of the currency itself. As China became one of the world’s preeminent centres of finance and trade in the early 21st century, the renminbi rose as a global currency. In recognition of the renminbi’s elevated status, in November 2015 the International Monetary Fund (IMF) announced that the renminbi was to become one of its reserve currencies.

The term Chinese yuan renminbi (CNY) refers to the currency used in the People’s Republic of China. Although it may seem a little confusing because the names are often depicted together, they’re actually two separate terms. A yuan acts as China’s unit of account for its financial system and economy, which represents a single unit of money.

The most important move to a market-oriented exchange rate was an easing of controls on trade and other current account transactions, as occurred in several very early steps. In 1979, the State Council approved a system allowing exporters and their provincial and local government owners to retain a share of their foreign exchange earnings, referred to as foreign exchange quotas. At the same time, the government introduced measures to allow retention of part of the foreign exchange earnings from non-trade sources, such as overseas remittances, port fees paid by foreign vessels, and tourism. Between 1930 and 1948, banknotes were also issued by the Central Bank of China denominated in customs gold units. These, known as “gold yuan notes”, circulated as normal currency in the 1940s alongside the yuan.

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate. China’s first domestically produced machine-struck dollar coin, or yuan, was minted in Guangdong province in 1890.