Chinese Currency Information

China had practiced the use of currency since the Stone Age, and paper money was invented way back in the 9th Century. Today, the currency of the People’s Republic of China is called renminbi, which directly translates to mean the "people's money". It is officially issued by the People’s Bank of China which has exclusive control of the currency.

The renminbi was first introduced in 1949, after the Communist revolution took over leadership of the country. The first task of the newly instated Communist party was to rectify the unfavorable economic circumstances, such as hyperinflation, which prevailed after the Kuomintang era. Therefore, in 1955, a major revaluation took place where one new yuan would equal the value of 10000 old yuan. As part of the dual track currency system established in 1978 to open up China’s economy, renminbi was exclusively a domestic currency and foreigners had to use foreign exchange certificates. Between the late 1980s and the early 1990s, the government took measures to make the renminbi a more convertible currency through the establishment of swap centers, which resulted in more realistic exchange rates. Following the Asian economic crisis in 1998, China had reservations about making the renminbi a fully convertible currency, fearing that the tremendous exchanges across the borders will prove too much for the government to cope. As a result, the renminbi is still far from being fully convertible today.

Names and Units
The unit of measurement for the renminbi is yuan, which means "round" in Chinese, referring to the shape of the old coins of the same name. The subdivision of a yuan is a jiao and this is divided further into fen. Sometimes, the yuan is also commonly referred to as kuai, and the jiao is also widely known as a mao. One yuan consists of 10 jiao and 1 jiao is made up of 10 fen. It is similar to how a dollar is worth 10 dimes and each dime is worth 10 pennies. If the price of an item is 1.25 yuan, it is read as 1 yuan, 2 jiao and 5 fen. The renminbi is usually denoted with the abbreviation RMB, and therefore 1.25 yuan can also be written as RMB1.25. In stores, prices are presented either with the Chinese character of yuan or a symbol of Y with a horizontal stroke in the middle.

Denominations
The denominations of the renminbi range from 1 fen to 100 yuan, which are all available in the form of banknotes, though the fen and jiao also come in the form of coins. There are seven denominations of the yuan that are still legal tender in China, and they are the 1 yuan, 2 yuan, 5 yuan, 10 yuan, 20 yuan, 50 yuan and 100 yuan banknotes. The jiao has three denominations of 1 jiao, 2 jiao and 5 jiao while the fen comes in 1 fen, 2 fen and 5 fen. Due to the fact that retail prices in China are inclusive of tax, the jiao and fen are becoming less and less significant as goods become more expensive. Chinese retailers often round-up their prices to the yuan, and therefore, most of the prices you see in shops will be simply, say, 7 yuan or 10 yuan.

The Different Circulation Series
Since the introduction of the renminbi, five different series of banknotes and coins have been issued, and the first three series are now obsolete. The value of each banknote is stated in both Chinese characters and Arabic numerals, and beginning from the fourth series onwards, Chinese Braille of the denominations can also be found on the front-sides of the banknotes. Geographical landscapes are featured on the reverse side of the fourth series banknotes, while ethnic people or people with Communistic themes grace the obverse sides. The fifth series banknotes, which consist of two editions issued in 1999 and 2005 respectively, feature China’s great Communist leader Chairman Mao Zedong on the front-sides with natural and man-made landscapes on the reverse. Measures to prevent counterfeiting were also implemented in the printing of the fifth series banknotes, which include watermarks and inks that will emit fluorescence when viewed under ultraviolet light. There were suggestions by members of the National People’s Congress in 2006 for the renminbi banknotes to feature other great Chinese leaders such as Deng Xiaoping and Sun Yat Sen, but so far, no concrete decisions has been made towards that direction.

The fourth series coins are still legal tender in China today, with denominations of 1 jiao, 2 jiao and 5 jiao. All coins are minted with the state emblem of China and the words "People's Republic of China" in both Chinese characters and hanyu pinyin on the front-sides. The reverse sides feature the numerical value of the coin and images of local flowers. The first edition of the fifth series replaced the 1 jiao and 5 jiao coins with new ones carrying the words "People's Bank of China" instead of the state name, and the state emblem was removed. No changes were done to the design of the coins in the second edition, but the material of the 1 jiao coin is changed to stainless steel.

Exchange Rates
For the last ten years, the renminbi was pegged closely to the US dollar at RMB8.28 to US$1. However, the United States pressured the Chinese to remove the peg, and this resulted in the renminbi gaining against the US dollar for a rate of RMB8.11 to US$1 in July, 2005. Instead of being exclusively pegged against the US dollar, China announced that the renminbi will be pegged to a few foreign currencies at the same time. From then, the renminbi has steadily increased against the US dollar, marking an exchange rate of RMB7.87 to US$1 as of November, 2006.