One System, Several Names: Breaking Down the Chinese Currency System

Posted on Posted in China Travel
For foreigners coming to China, the money system can be frustrating with all the various names describing the same thing. Cash (and WeChat Pay/Alipay) is key in China, and foreigners often can’t use debit/credit cards. Therefore, it’s increasingly important for travelers to become familiar with the currency system.
Which terms stand for what, and how much are all of these bills and coins worth?

 

Renminbi (RMB) or Yuan (CNY)? Not quite interchangeable.

When the People’s Republic of China was founded in 1949, Mao Zedong and the People’s Bank of China introduced a new currency system: Renminbi – literally meaning “the people’s currency.”

The name of the Chinese currency is referred to as Renminbi. However, when you’re at the store, you don’t say that something costs “10 Renminbi.”

It costs “10 Yuan(10元 or 10¥). The Yuan is the Chinese equivalent of the
U.S. dollar. It is used as the unit of measurement for the currency system.

(Don’t get confused – the ¥ symbol is also used for the Japanese Yen, but the two are definitely not interchangeable currencies)

 

Do they use the Renminbi system anywhere else?

Not quite. Hong Kong and Macau, both special administrative regions (SARs) just south of China, operate on their own currency systems. In addition, Taiwan utilizes the New Taiwan dollar.

The Hong Kong dollar is sometimes accepted in Shenzhen and the south of China, but otherwise the HKD, TWD, and the Macau Pataca are their own independent systems.

 

 

Isn’t money referred to in more ways than just Renminbi and Yuan?

To reiterate, the Renminbi is simply the Chinese currency system. The Yuan is the Chinese equivalent of a dollar. However, sometimes when referring to prices, people might say that something costs “10 kuài” (pronounced “kwai”).

Kuài literally means “piece” in Mandarin. Used as more of a slang term (kind of like “bucks” in place of “dollars” in the United States), you’re more than likely to come across this term during your stay in China.

In addition, you might hear foreigners and English speakers in China simply refer to 10 Yuan as “10 RMB.

 

 

 

 

 


What are all of these different coins and bills sitting in my wallet?

Just like most other currency systems, the Yuan can be broken down even further. One Yuan is equivalent to 10 Jiao (more commonly referred to as “Mao” – no connection to the early Communist leader, Chairman Mao Zedong). Further, one Mao is equivalent to 10 fen (below). However, fen coins are pretty much never used and are virtually out of circulation.

[ 1 RMB = 10 Jiao = 10 fen ]


Jiao/mao can be found on both banknotes and coins (below), which is where it gets a little more confusing. The Jiao banknotes are smaller than the Yuan banknotes, and they are noticeably different. These come in 1 Jiao and 5 Jiao bills. Yuan comes in 1, 5, 20, 50, and 100¥ bills.

 

 

You will also likely encounter 1 Yuan coins (below). They are noticeably larger than the 1 and gold 5 Jiao coins, and depict the Chrysanthemum flower on the reverse side. The 1 Jiao and 5 Jiao coins depict the Orchid and Lotus flowers respectively.

 

 

 

 

 

 

So what?

As you will quickly find out, you can’t really use international credit/debit cards in many places unless you are shopping in a larger department store. Markets, taxis, and smaller restaurants will only accept cash or WeChat Pay/AliPay (which is a whole other enormous payment industry and difficult to set up without a Chinese bank account).

However, the Renminbi is quickly gaining global significance. Usage of the CNY has gone up 21 times since 2010. With the government lowering its restrictions with the currency on an international setting, it is estimated that 28% of China’s international trade deals will be handled in RMB by 2020.

 

At the current conversation rate, June 2017:

[ ¥6.80 CNY = $1 USD = = 1.12 EUR ]
 

[ ¥1 CNY = $0.15 USD = 0.13 EUR ]

 

 

Last year, it even surpassed the Australian and Canadian dollars as one of the Top 5 most used currencies in the world.

Yes, sometimes all the different kinds of coins and bills with Mao Zedong’s face on them may become confusing, but the Chinese Yuan is quickly gaining international significance. In addition, it’s incredibly important for expats and visitors to be able to understand and properly handle cash while in China.

 

 

By Justin Poythress

 

Sources:

China: Money Questions.” TripAdvisor. N.p., n.d. Web. 16 June 2017.  <https://www.tripadvisor.in/Travel-g294211-c119677/China:Money.Questions.html>.

Mulvey, Stephen. “Why China’s Currency Has Two Names.” BBC News. BBC, 26 June 2010.  Web. 16 June 2017. <http://www.bbc.com/news/10413076>.

Van Hinsbergh, Gavin. “Chinese Money – a Cultural Guide.” China Highlights. N.p., 20 Feb. 2017. Web. 16 June 2017. <http://www.chinahighlights.com/travelguide/money.htm>.

 


 

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