Renminbi

The renminbi is the official currency of China. Its name means "People's Currency." It is issued by the People's Bank of China, which manages the country's money. As of April 2025, the renminbi is one of the most important currencies in the world.

The basic unit of the renminbi is called the Chinese yuan. People often use the word "yuan" when talking about Chinese money, especially with people from other countries.

Each yuan is divided into smaller parts. One yuan equals 10 jiao, and each jiao is further divided into 10 fen. These smaller units help people make exact payments for everyday items. The symbol for the renminbi is ¥, and its international code is CNY.

Exchange rate

Until 2005, the renminbi's value was linked to the US dollar. As China grew and joined more world trade, the renminbi's value changed. By 2015, experts thought it was valued fairly.

In 2016, the renminbi joined a group of important currencies used by the International Monetary Fund. This showed the renminbi was becoming more important in global finance.

Terminology

The official code for the renminbi is CNY. This combines China's country code CN with the letter Y from "yuan." When used outside of China, the renminbi is called CNH. Its value changes based on market conditions. Inside China, the currency is always CNY. Its value is set daily by the People's Bank of China.

People often call the renminbi "yuan." This is the main unit of the currency. Other smaller units include jiao and fen. In everyday speech, Chinese speakers usually say "kuai" (meaning "piece") when talking about money. For example, they might say "eight kuai" for ¥8. The symbol for the yuan is ¥, but to avoid confusing it with the Japanese yen, people sometimes write "RMB" before the amount.

History

See also: History of Chinese currency

Many kinds of money called yuan or dollar were used in places like mainland China, Taiwan, Hong Kong, Macau, and Singapore. These started from a type of money called the Spanish dollar that China brought in from Spanish America a long time ago. The first silver dollar or yuan made in Qing dynasty China was called the silver dragon dollar and it started in 1889. Later, paper money called banknotes was made, and it could be exchanged for silver dollars until 1935.

The renminbi, China’s main money, was started by the People's Bank of China in December 1948. At first, it was only paper money, and it replaced the different kinds of money used in areas controlled by the Communists. After this, in 1955 the value of the money was changed: 1 new yuan became worth 10,000 old yuan.

In 2019, the People’s Bank of China made new versions of renminbi banknotes and coins. These new notes included the ¥50, ¥20, ¥10, and ¥1 notes, plus the ¥1, ¥0.5, and ¥0.1 coins. The new money had better safety marks, nicer colors, and better printing.

In the early 2020s, China started a digital version of the renminbi, also called the digital yuan or e-CNY. This digital money was tested in cities like Shenzhen, Suzhou, and Chengdu starting in 2020. By 2023, it could be used for things like riding buses, getting government money, and buying things in stores. The digital yuan is meant to make payments easier and give people another way to pay.

Era of the command economy

Further information: Command economy

From 1949 until the late 1970s, the government controlled China’s money very tightly. They set the value of the renminbi much higher than it really should be.

Transition to an equilibrium exchange rate

By the mid-1990s, China started changing how it decided the value of its money. This was a slow process. The government let businesses keep some of the money they earned from selling things to other countries.

Foreign exchange certificates, 1980–1994

From 1980 to 1994, people from other countries visiting China used special money called foreign exchange certificates or FECs. These were different from regular renminbi and could only be used in special stores for tourists.

Evolution of exchange policy since 1994

In 1993, China decided to change how it handled money from other countries. The goal was to let the renminbi find its own value in the world.

Convertibility

During the time when the government tightly controlled the economy, the renminbi’s value was set too high compared to money from Western countries. In the late 1980s and early 1990s, China worked to make the renminbi easier to trade with other currencies. By 1994, the value was changed to be more realistic, and special tourist money was stopped. It stayed this way until 2005 when China let the renminbi change value a little more freely.

As of 2013, the renminbi could be used for everyday trades but not for big investments going in and out of the country. The goal is to let it be used for everything, but China worries about sudden big changes in money moving in and out, so it still controls it tightly.

Following the internationalization of the renminbi, on 30 November 2015, the IMF voted to designate the renminbi as one of several main world currencies, thus including it in the basket of special drawing rights. The renminbi became the first emerging market currency to be included in the IMF's SDR basket on 1 October 2016. The other main world currencies are the dollar, the euro, sterling, and the yen.

Digital renminbi

Main article: Digital renminbi

In October 2019, China’s central bank, PBOC, said it would create a digital renminbi. This digital money, also called DCEP, could work without normal banks, helping visitors and supporting a society where people use less cash. The PBOC has created many ideas and plans for this digital money, using special computer technology called blockchain.

Interest rate and green bonds

In May 2023, RMB interest rate swaps was launched. In June 2023, under the Government Green Bond Programme, the Government of the Hong Kong Special Administrative Region of the People's Republic of China (HKSAR) announced a green bonds offering, of approximately US$6 billion denominated in USD, EUR and RMB.

Issuance

Renminbi banknotes come in different values, like ¥0.1, ¥0.5, ¥1, up to ¥100. These values have been used since 1955, and some notes like the ¥20 were added later in 1999. Coins are also available, from ¥0.01 to ¥1. Some smaller coins are used less often today because prices have gone up.

The numbers on the banknotes are shown in Chinese characters and Arabic numbers. Special designs help people who are blind feel the value of each note. The Chinese yuan is also called different names in some areas, like "tugreg" in Inner Mongolia and "gor" in Tibet. The currency is made by a special company with factories all over China.

Economics

See also: Renminbi currency value

For most of its early history, the renminbi was pegged to the U.S. dollar at ¥2.46 per dollar. In the 1970s, its value changed until it reached ¥1.50 per dollar in 1980. When China's economy opened in the 1980s, the renminbi was changed again to help Chinese exports. By 1994, the rate was ¥8.62 per dollar.

In 2015, the People's Bank of China changed the value of the renminbi again. As of September 1, 2015, the exchange rate for US$1 was ¥6.38.

The renminbi now uses a managed floating exchange rate based on market supply and demand, with reference to a basket of foreign currencies. This helps China manage its economy and trade.

Main article: Internationalization of the renminbi