CNY - Chinese Yuan

The Chinese Yuan (currency code: CNY) is the official currency of the People’s Republic of China.

Although the yuan was once pegged to the U.S. dollar, at a rate of 8.28 renminbi for 1 dollar, since 2005, China abandoned that system and allowed the yuan to float within a narrow margin around a fixed base rate which is determined using a basket of world currencies. The Chinese yuan is the 8th most traded currency in the world.

The word yuan (yuan is pronounced like “wren”) means round object, or coin. It represents the base unit through which all currencies are expressed. For example, the U.S. dollar is referred to as Mei yuan. The currency itself that is actually present in all the monetary transactions and referred to as the Chinese yuan is actually the Renminbi (currency code: RMB). Renminbi means “people’s currency”, and has been legal tender of China for more than 5 decades. The Chinese Yuan Renminbi can be divided into 10 jiao, or mao, which are further divided into 10 fen. In Cantonese, the equivalent names for jiao and fen are ho and sin, respectively.

Yuan History

Although the yuan, or Renminbi, is the current official currency in China, and has been for more than 50 years, China has had a number of different currencies that have preceded it. In fact, China was one of the first countries to create currency, so that the goods could have been exchanged for money. The first coins were struck around the 4th century B.C, in bronze. They had a hole in the middle, and the Chinese would put them on strings and carry them that way.

China was also one of the first nations to introduce paper money into circulation around 910 A.D. This shape of currency fascinated the famous explorer Marco Polo, who was amazed by the fact that the Emperor could print all money he needed, which would cost himself very little, and buy just about anything. Often, paper currencies were used in areas where there was a shortage of certain metals or goods, which was the case in Szechwan, which created the currency based on iron, due to shortage of copper in the area.

In the 19th century, the most widespread currency in Asia was the Spanish dollar, and any off-shoots of it, such as the peso, especially in Southeast Asia. The yuan was created, with an exchange rate of 1:1 for a single Mexican peso. The first yuan was comprised of 1000 smaller units, called cash, 100 units, which where called fen or cents, or 10 jao units. The yuan effectively replaced all the copper coins that were used in the trades, and even silver ingots, which were called sycees, at a rate of 0.72 tael for 1 yuan, since sycees were denominated in taels.

Along with coins, banknotes denominated in yuans were also printed and introduced into circulation, by the Imperial of Bank and the Hu Pu Bank. Also, some of the private local banks were allowed to print notes by the Imperial government. While there were notes that were denominated in jiao, they were rare. The yuan notes existed in the following denominations: 1, 2, 5, 10, 50 and 100 yuan.

The modern-day Renminbi was introduced by the Chinese Communist Party and the Bank of China, which they ran, in 1948. During that period, there was a civil war going on between the Communist and the Nationalists, which had their own currency. The Communists succeeded in beating the nationalists, by winning the mainland. This would not have been possible if it weren’t for the Renminbi, which financially stabilized the areas where the Communists were prevalent.

Chinese Yuan Coins

The first series of aluminium coins was issued in 1955, with denominations of 1, 2, and 5 fen. The design of the obverse featured the state seal, while the name and denomination framed with wheat stocks were depicted on the reverse. Coins denominated in jiao and yuan were also issued in 1980. Jiao coins were struck in brass, with denominations of 1, 2 and jiao, while the 1-yuan coin was minted in cupronickel. All jiao coins featured the same theme as the fen coins. Yuan coins, on the other hand, depicted the Great Wall of China. The popularity of coins varies depending on the area. They are more popular in areas, whereas smaller banknotes are preferred in rural areas. Even though the old fen coins are nearly out of circulation, they can still be exchanged.

Chinese Yuan Notes

There is a total of 5 series of banknotes printed by the People’s Republic of China. The first series, with denominations of 1, 5, 10, 20, 50, 100 and 1000 yuan, was issued in 1948. One year later, 200, 500, 5000 and 10,000-yuan banknotes were added. Also, in 1950, 50,000-yuan note was introduced into circulation.

The current series has been in circulation since 1999. Today, banknotes denominated in 1, 5, 10, 20, 50 and 100 yuan are available. This series features a portrait of Mao Zedong on all notes, as opposed to notable people from Chinese history, which was the case before. Various security features were also implemented, making the Renminbi harder to counterfeit.