The official currency of the People's Republic of China is the Renminbi (RMB), which means "People's Currency" in Mandarin. The basic unit of RMB is the yuan (元), which is used in both formal and informal contexts.
Key Facts about Chinese Currency
- ISO Code: CNY
- Symbol: ¥ (also uses 元)
- Nickname: "Kuai" (块) in spoken Chinese
- Subdivisions: 1 yuan = 10 jiao = 100 fen
History of the Renminbi
The Renminbi was first issued by the People's Bank of China in 1948, just before the establishment of the People's Republic of China. Since then, it has undergone several series of designs and denominations.
Key Milestones
- 1948: First issuance of the Renminbi
- 1955: First major currency reform, new designs introduced
- 1962: Introduction of the foreign exchange certificates (FEC) for use by foreigners
- 1988: Introduction of the 100 yuan note
- 1994: Unification of the dual-track currency system, abolishing FEC
- 2015: New 100 yuan note with enhanced security features introduced
Current Banknotes and Coins
Banknotes
The current series (2019) of Renminbi banknotes includes the following denominations:
- ¥1 (rare in circulation)
- ¥5
- ¥10
- ¥20
- ¥50
- ¥100
Coins
Coins are available in the following denominations:
- 1 fen (rare)
- 5 fen (rare)
- 1 jiao
- 5 jiao
- 1 yuan
Security Features
Modern Chinese banknotes incorporate several security features to prevent counterfeiting:
- Watermarks
- Security threads
- Color-shifting ink
- Microprinting
- Tactile printing for the visually impaired
International Use and Exchange
In recent years, China has been promoting the internationalization of the RMB. It's increasingly used in international trade and has been included in the International Monetary Fund's Special Drawing Rights basket since 2016.
Exchange Rates
The exchange rate of the Renminbi is managed by the People's Bank of China. Since 2005, China has adopted a managed floating exchange rate system based on market supply and demand with reference to a basket of currencies.
Offshore Renminbi Market
The offshore Renminbi (CNH) market has developed rapidly, allowing the currency to be traded more freely outside mainland China, particularly in Hong Kong.
Digital Yuan
China is at the forefront of developing a central bank digital currency (CBDC), known as the Digital Currency Electronic Payment (DCEP) or Digital Yuan. This initiative aims to:
- Enhance financial inclusion
- Improve the efficiency of monetary policy
- Counter the rise of private cryptocurrencies
As of 2023, the Digital Yuan is in advanced stages of testing across various cities in China, with plans for wider adoption in the near future.