In Cantonese, widely spoken in Guangdong, Guangxi, Hong Kong and Macau, the yuan, jiao, and fen are called mān, hòuh, and sīn, respectively. A yuan is also known colloquially as a kuai (; originally a lump of silver). As of April 2025, the Chinese yuan has fallen to its lowest level vs. the U.S. dollar since 2007 amid an escalating U.S.-China trade war.
Chinese Yuan vs Renminbi: Differences and Internationalization
It was worth 20 of the yuan which circulated in the rest of the country. It was replaced in 1948 by the gold yuan at a rate of 150,000 north-eastern yuan to 1 gold yuan. In 1945, notes were introduced in denominations of 1, 5, 10, 50 and 100 yuan. 500 yuan notes were added in 1946, followed by 1,000 and 2,000 yuan in 1947 and 5000 and 10,000 yuan in 1948. An important aspect of the yuan’s international presence is the distinction between its onshore (CNY) and offshore (CNH) exchange rates.
Yuan vs RMB: What is the Difference?
The term “yuan” is also used internationally to denote China’s currency, particularly in the context of foreign exchange (forex) markets. The value of the RMB was tightly controlled during the period of the command economy. The PBOC allowed the yuan to trade on international markets as the Chinese economy began opening to the world market, but the floating exchange rate was still tightly controlled. The renminbi, introduced in 1948, is abbreviated as RMB but it is not an official currency code.
Bitgo Receives German Approval to Offer Regulated Crypto Trading Services in Europe
A storekeeper in China might also express prices in terms of kuai, which translates into “pieces” and is similar to how Americans use “bucks” to mean dollars.
Global Trade and Economics
- The modern-day Chinese yuan uses the abbreviation CNY to distinguish between the mainland currency and other uses of the word.
- In September 2023, the renminbi passed the euro as the second most utilized currency in international trade, having tripled in the last three years.
- The value of the RMB was tightly controlled during the period of the command economy.
- The renminbi became the world’s 8th most traded currency in 2013, 5th by 2015, but 6th in 2019.
- The Chinese yuan renminbi is the currency used in the People’s Republic of China.
The origins of China’s modern currency system can be traced back to the establishment of the People’s Bank of China (PBOC) in 1948. Before the renminbi, various regions in China used different currencies, leading to economic fragmentation and instability. The introduction of the renminbi aimed to unify the currency system under a single, stable monetary framework, facilitating trade and economic growth.
This silver yuan remained the de jure official currency of the Republic government in Taiwan until 2000. In 1917, the warlord in control of Manchuria, Zhang Zuolin, introduced a new currency, known as the Fengtien yuan or dollar, for use in the Three Eastern Provinces. It was valued at 1.2 yuan in the earlier (and still circulating) “small money” banknotes and was initially set equal to the Japanese yen.
Understanding the CNH Market
This began to change as the Chinese government began to promote international use of the RMB. The currency allowed the new administration to unify the Chinese economy, which was then divided among several regional currencies. It also distinguished the new administration from the previous government, whose policies had led to high levels of hyperinflation. The largest banknote is 100 yuan, followed by 50 yuan, 20 yuan, 10 yuan, five yuan, and one yuan. There are 10 jiao in a yuan, like dimes in a dollar, and 10 fen in a jiao.
Banknotes and Coins
This marked a significant milestone in the development of the Chinese yuan. The renminbi’s valuation has been influenced by various factors, including the financial crisis and China’s economic policies. In August 2015, China re-pegged the renminbi to the US dollar, which has been seen as a move to stabilize the currency. As China transitioned from a central planning economy to a market economy, the renminbi was devalued to increase the competitiveness of Chinese industry.
The Chinese yuan renminbi is the currency used in the People’s Republic of China. Yuan is the actual unit of currency for China’s financial system and economy, representing a single unit of money. 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. As noted above, the term “yuan” refers to a single unit of the currency, while the term “renminbi” refers to the actual name of the currency itself. 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 plus500 legit check founding in 1949.
- The central government began issuing its own coins in the yuan currency system in 1903.
- China’s renminbi (RMB) has been making waves in the international market, and it’s not just a matter of curiosity.
- The increasing use of the yuan in international transactions reflects China’s growing economic influence and the efforts to internationalize its currency.
- In July 2005, the daily trading price of the US dollar against the renminbi in the inter-bank foreign exchange market was allowed to float within this narrow band.
The exchange rate for CNH, on the other hand, is determined by market forces and fluctuates freely based on supply and demand. This can result in discrepancies between the exchange rates of CNH and CNY when compared to other foreign currencies. Hong Kong remains the most active offshore market, with more than 30 offshore RMB markets worldwide emerging as a result.
China’s state-controlled economy was characterized by a top-down approach, where the government made decisions on production, distribution, and pricing of goods and services. The overvaluation allowed the government to provide imported machinery and equipment to priority industries at a lower domestic currency cost than otherwise would have been possible. The CNH is traded freely in Hong Kong, whereas the yuan is subject to restrictions in Mainland China. The managed float system allows the renminbi to float within a narrow band of 0.3% around the central parity published by the People’s Bank of China. The CNH market is just one part of China’s currency system, which has undergone significant changes over the years. China has worked to make the renminbi more convertible, with the goal of making it fully convertible in the future.
The Renminbi (RMB) is the official name given to the currency belonging to the People’s Republic of China. Over the past week, the closing price fluctuated between 7.12 and 7.13 yuáns. For the sake of easy carriage, the bank staff will always give you some big notes.