Information about Chinese Renminbi

This article is about the currency. For other uses, see Renminbi (disambiguation).

Chinese renminbi 人民币 (Chinese)
¥100 banknote and 1 jiao coin ¥100 banknote and 1 jiao coin
ISO 4217 Code	CNY
User(s)	Mainland of the People's Republic of China
Inflation	1.5%
Source	[https://www.cia.gov/library/publications/the-world-factbook/fields/2092.html The World Factbook], 2006 est.
Pegged with	A basket of currencies
Subunit
1/10	jiao (角)
1/100	fen (分)
Symbol	¥
Nickname	kuài (块)
jiao (角)	máo (毛)
Plural	The language(s) of this currency does not have a morphological plural distinction.
Coins''
Freq. used	1, 5 jiao, ¥1
Rarely used	1, 2, 5 fen
Banknotes''
Freq. used	1, 5 jiao, ¥1, ¥5, ¥10, ¥20, ¥50, ¥100
Rarely used	2 jiao, ¥2
Central bank	People's Bank of China
Website	www.pbc.gov.cn

The renminbi (Simplified Chinese: 人民币; Traditional Chinese: 人民幣; Pinyin: rénmínbì; literally "people's currency") is the official currency in the mainland of the People's Republic of China (PRC).^[1], whose principal unit is the yuan (Simplified Chinese: 元 or 圆; Hanyu Pinyin: yuán; Wade-Giles: yüan). It is issued by the People's Bank of China, the monetary authority of the PRC.^[2] The official ISO 4217 abbreviation is CNY, although also commonly abbreviated as "RMB". The Latinised symbol is ¥.

The two special administrative regions, Hong Kong and Macau, have their own respective currencies. According to the one country, two systems principle and the basic laws of the two territories,^{[3] [4]} national laws generally do not apply. Therefore, the Hong Kong dollar and the pataca remain the legal tenders in the two territories, and renminbi, although accepted, is not legal tender.

History

The renminbi was first issued by the People's Bank of China in December 1948, about a year before the Chinese Communist Party's victory in the Chinese Civil War. One of the first tasks of the new communist government was to end the hyperinflation that had plagued China near the end of the Kuomintang (KMT) era. A revaluation occurred in 1955 at the rate of 1 new yuan =10,000 old yuan.

During the era of the command economy, the value of the RMB was set to unrealistic values in exchange with western currency and severe currency exchange rules were put in place. With the opening of the mainland Chinese economy in 1978, a dual track currency system was instituted, with renminbi usable only domestically, and with foreigners forced to use foreign exchange certificates. The unrealistic levels at which exchange rates were pegged led to a strong black market in currency transactions.

In the late 1980s and early 1990s, the PRC worked to make the RMB more convertible. Through the use of swap centers, the exchange rate was brought to realistic levels and the dual track currency system was abolished.

The RMB is convertible on current accounts, but not capital accounts. The ultimate goal has been to make the RMB fully convertible. However, partly in response to the Asian financial crisis in 1998, the PRC has been concerned that the mainland Chinese financial system would not be able to handle the potential rapid cross border movements of hot money, and as a result, as of 2007, the currency trades within a narrow bandwidth specified by the Chinese central government.

Use outside mainland China

Under the one country, two systems policy, Hong Kong maintains a separate currency, the Hong Kong dollar. The RMB is the second most popular currency in Hong Kong and is becoming the principal trading currency in the region.^[5][6] Banks in Hong Kong allow people to maintain accounts in RMB. ^[7]

Macau, with its own one country, two systems policy, maintains the separate pataca as its currency. The RMB has always had a presence even before the 1999 return to the People's Republic of China from Portugal. Banks in Macau can issue credit cards based on the renminbi, but not loans. Renminbi based credit cards can not be used in Macau's casinos. ^[8]

Use of the renminbi in Taiwan is illegal. The Republic of China government believes wide usage of the renminbi would create an underground economy and undermine its sovereignty.^[9] Tourists are allowed to bring in up to 20,000 renminbi when visiting Taiwan. These renminbi must be converted to the New Taiwan dollar at trial exchange sites in Matsu and Kinmen.^[10] Taiwan insists that it will not allow full convertibility until the mainland signs a bilateral foreign exchange settlement agreement.^[11]

In Mongolia, the RMB occupies 60% of the local cash circulation. Cambodia and Nepal welcome the renminbi as an official currency and Laos and Myanmar allow it in border provinces. Though unofficial, Vietnam recognizes the exchange of renminbi to đồng.^[12]

Yuan and other renminbi units

The base unit of the renminbi is the yuan. As with Chinese numerals, this character has two forms — a common simplified form (元) and a formal form (圆/圓) used to prevent alterations and accounting mistakes.

Yuan is a one syllable word and in Chinese literally means round, after the round shape of ancient Chinese coins by the same name. The Korean and Japanese currency names, won and yen respectively, are cognates of the yuan and have the same Chinese character (hanja/kanji) representation, but in different forms (respectively, 원/圓 and 円/圓), also meaning round in Korean and Japanese. However, they do not share the same names for the subdivisions (fen, jiao).

One yuan is divided into 10 jiao (角), and one jiao is divided into 10 fen (分). So 3.45 yuan would be spoken of as "3 yuan 4 jiao 5 fen", as opposed to "3 yuan 45 fen". Other names are often used colloquially; see yuan for details. Yuan is also commonly translated into English simply as the "dollar."

Although shop prices in the PRC are usually marked with 元 after the digits, a Y with one or two crossbars (¥) before the numeral digits is also common. Some people using an American keyboard may type CN$ out of convenience, for the ¥ symbol.

The largest denomination of the renminbi is the 100-yuan note. The smallest is the 1-fen coin or note. All denominations are available as banknotes. The fen notes are now rather insignificant, and the design has not changed since 1953. Since sales tax in China are included in the prices, the fen and jiao have become increasingly unnecessary as prices increase. Chinese retail prices also tend to avoid decimal values (such as $9.98), opting instead for integer values of yuan (such as ¥9 or ¥10).^[13]

RMB series

The denomination of each banknote is given in Chinese. The numbers themselves are given in financial Chinese numeral characters, as well as Arabic numerals. The denomination and the words 'China People's Bank' are also given in Mongol, Tibetan, Uyghur and Zhuang on the back of each banknote. On the front of the note is also the representation of the denomination in Chinese Braille starting from the fourth series.

The use of coins varies from place to place. For example, coins are more often used for values less or equal to ¥1 in Shanghai, but banknotes of the lower value are more often used than coins in Beijing.

First series

Main article: First series of the renminbi

The first series of Renminbi banknotes was introduced during the Chinese Civil War by the newly-founded People's Bank of China on December 1, 1948, nearly one year before the founding of the People's Republic of China itself.

The notes were issued in 12 denominations: ¥1, ¥5, ¥10, ¥20, ¥50, ¥100, ¥200, ¥500, ¥1,000, ¥5,000, ¥10,000 and ¥50,000, with a total of 62 designs. They were officially withdrawn on various dates between April 1, 1955 to May 10, 1955.

Second series

Main article: Second series of the renminbi

The second series of Renminbi banknotes was introduced since March 1, 1955. Together with the introduction of the second series, the decimal point was moved 4 places to the left. As a result, one first series ¥10,000 note is equivalent to one second series ¥1 note.

Each note has the words "People's Bank of China" as well as the denomination in the Uyghur, Tibetan, Mongol and Zhuang languages on the back, which has since appeared in each series of renminbi notes.

The denominations available in banknotes were ¥0.01, ¥0.02, ¥0.05, ¥0.1, ¥0.2, ¥0.5, ¥1, ¥2, ¥3, ¥5, ¥10.

The denominations available in coins were ¥0.01, ¥0.02, ¥0.05.

Third series

Main article: Third series of the renminbi

The third series of renminbi banknotes was introduced since April 15, 1962. For the next two decades, the second and third series banknotes were used concurrently.

The denominations available in banknotes were ¥0.1, ¥0.2, ¥0.5, ¥1, ¥2, ¥5, ¥10

The issuance of coins (¥0.1, ¥0.2, ¥0.5, and ¥1) began in 1980.

The third series was phased out over the 1990s and then was recalled completely on July 1, 2000, a date valid for all of the denominations with only one date provided.

Fourth series

Main article: Fourth series of the renminbi

The fourth series was introduced between 1987 and 1997, although the banknotes were dated 1980, 1990, or 1996. Unlike the third series, they are still legal tender. Banknotes are available in:

¥0.1, ¥0.2, ¥0.5, ¥1, ¥2, ¥5, ¥10, ¥50, ¥100

and newly designed coins of ¥0.1, ¥0.5, and ¥1.

Fifth series

Main article: Fifth series of the renminbi

In 1999, a new series of renminbi banknotes and coins was progressively introduced. The fifth series consists of coins of ¥0.1, ¥0.5, and ¥1 and banknotes of ¥1, ¥5, ¥10, ¥20, ¥50, ¥100

Possible future design

On March 13, 2006, some delegates to an advisory body at the National People's Congress proposed to include Sun Yat-sen and Deng Xiaoping on the renminbi banknotes. However, the proposal is a long way from becoming law.^[14]

Exchange rate

China's currency, which for the previous decade had been tightly pegged at 8.28 renminbi to the U.S. dollar, was revalued on July 21, 2005 to 8.11 per U.S. dollar, following the removal of the peg to the US dollar and pressure from the United States. The People's Bank of China also announced that the renminbi would be pegged to a basket of foreign currencies, rather than being strictly tied to the U.S. dollar, and would be allowed to float trade within a narrow 0.3% daily band against this basket of currencies. The PRC has stated that the basket is dominated by the U.S. dollar, Euro, Japanese yen and South Korean won, with a smaller proportion made up of the British pound, Thai baht, Russian ruble, Australian dollar, Canadian dollar and Singapore dollar.

As of August 29, 2007 the renminbi traded at 7.5505 yuan per U.S. dollar which is a 9.7% increase since the removal of the peg. There are frequent suggestions that the yuan is undervalued, often on the basis of purchasing power parity analysis (see below). However, some studies suggest that the yuan is not in fact undervalued^[15].

Purchasing power parity

The World Bank estimated (in World Development Indicators 2006) that, by purchasing power parity, one United States dollar was equivalent to approximately ¥1.9 in 2004.

The International Monetary Fund estimated (in World Economic Outlook Database, April 2007) that, by purchasing power parity, one United States dollar was equivalent to approximately ¥2.021 in 2004, ¥2.047 in 2005, ¥2.062 in 2006, and is expected to be equivalent to approximately ¥2.095 in 2007.

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See also

• Chinese lunar coins
• Economy of the People's Republic of China

References

External links

• (Chinese) (English) SinoBanknote
• Don's World Coin Gallery - China* Ron Wise's World Paper Money - China, Peoples Republic ^{Mirror site}* Tables of Modern Monetary Systems by Kurt Schuler - Asia ^{Mirror site}* The Global History of Currencies - China* Global Financial Data data series - China Yuan Renmimbi* Global Financial Data currency histories table ( Microsoft Excel format)
• How to detect counterfeit Chinese money
• Photographs of all Chinese currency and sound of pronunciation in Chinese
• What is the new Chinese currency regime?
• RMB current exchange rate and historical graphs
• Economist article on Chinese currency valuation
• Discussion on how the basket peg works
• Chinese Bill Tracking

News

• China Severs Its Currency's Link to Dollar, Washington Post, 21 July 2005
• China lifts currency basket lid, BBC, 10 August 2005
• 1, 2 and 5 fen banknotes to be withdrawn, from Xinhua online.

•  • [ e] Currencies of China
Overview	Chinese currency
Ancient and medieval	Knife money Flying cash Jiaozi Huizi
Near modern	Wen Candareen (fēn) Mace (qin) Tael (liǎng)
Republic of China	Yuan Customs gold unit OT$ (yuan) NT$ (yuan)
Renminbi series	1st 2nd 3rd 4th 5th
Special administrative regions	Hong Kong dollar Macanese pataca

•  • [ e] Currencies of Asia
Central	Afghan afghani Kazakhstani tenge Kyrgyzstani som Mongolian tgrg Russian ruble Tajikistani somoni Turkmenistani manat Uzbekistani som
East	Chinese yuan Hong Kong dollar Japanese yen Macanese pataca North Korean won New Taiwan dollar South Korean won
South-East	Brunei dollar Cambodian riel Indonesian rupiah Lao kip Malaysian ringgit Myanmar kyat Philippine peso Singapore dollar Thai baht U.S. dollar (East Timor) Vietnamese đồng
South	Bangladeshi taka Bhutanese ngultrum Indian rupee Maldivian rufiyaa Nepalese rupee Pakistani rupee Sri Lankan rupee
West	Armenian dram Azerbaijani manat Bahraini dinar Cypriot pound Egyptian pound Georgian lari Iranian rial Iraqi dinar Israeli new sheqel Jordanian dinar Kuwaiti dinar Lebanese lira Omani rial Qatari riyal Saudi riyal Syrian pound Turkish new lira UAE dirham Yemeni rial