Renminbi
The renminbi is the official currency of China. The renminbi is issued by the People's Bank of China, the monetary authority of China. It is the world's fifth-most-traded currency as of April 2025. The Chinese yuan is the basic unit of the renminbi.
One yuan is divided into 10 jiao, and the jiao is further subdivided into 10 fen. The word yuan is widely used to refer to the Chinese currency generally, especially in international contexts.
Valuation
Until 2005, the value of the renminbi was pegged to the US dollar. As China pursued the reform and opening up to transition from central planning to a market economy and increased its participation in foreign trade, the renminbi was devalued to increase the competitiveness of Chinese industry. It has previously been claimed that the renminbi's official exchange rate was undervalued by as much as 37.5% against its purchasing power parity. However, more recently, appreciation actions by the Chinese government, as well as quantitative easing measures taken by the American Federal Reserve and other major central banks, have caused the renminbi to be within as little as 8% of its equilibrium value by the second half of 2012. Since 2006, the renminbi exchange rate has been allowed to float in a narrow margin around a fixed base rate determined with reference to a basket of world currencies. By 2015, the IMF assessed it as no longer undervalued. The Chinese government has announced that it will gradually increase the flexibility of the exchange rate. As a result of the rapid internationalization of the renminbi, it became the world's 8th most traded currency in 2013, 5th by 2015, but 6th in 2019.On 1 October 2016, the renminbi became the first emerging market currency to be included in the IMF's special drawing rights basket, the basket of currencies used by the IMF as a reserve currency. Its initial weighting in the basket was 10.9%.
Terminology
| Chinese | pinyin | English | Literal translation | |
| Formal currency name | p=rénmínbì | renminbi | "people's currency" | |
| Formal name for 1 unit | or | p=yuán | yuan | "unit", "circle" |
| Formal name for unit | p=jiǎo | jiao | "corner" | |
| Formal name for unit | p=fēn | fen | "fraction", "cent" | |
| Colloquial name for 1 unit | p=kuài | kuai or quay | "piece" | |
| Colloquial name for unit | p=máo | mao | "feather" |
The ISO code for the renminbi is CNY, the PRC's country code plus "Y" from "yuan".
Renminbi that is traded off-shore uses the designation CNH, while the on-shore currency is designated CNY. CNY is used only in mainland China, is controlled by the People's Bank of China, and uses a fixed daily exchange rate. CNH is used outside of the mainland, isn't restricted like CNY, and the exchange rate is determined by the market.
The abbreviation RMB is not an ISO code but is sometimes used like one by banks and financial institutions.
The currency symbol for the yuan unit is ¥, but when distinction from the Japanese yen is required RMB or ¥ RMB is used. However, in written Chinese contexts, the Chinese character for yuan or, in formal contexts c=圆, usually follows the number in lieu of a currency symbol.
Renminbi is the name of the currency while yuan is the name of the primary unit of the renminbi. This is analogous to the distinction between "sterling" and "pound" when discussing the official currency of the United Kingdom. Jiao and fen are also units of renminbi.
In everyday Mandarin, kuai is usually used when discussing money and "renminbi" or "yuan" are rarely heard. Similarly, Mandarin speakers typically use mao instead of jiao. For example, ¥8.74 might be read as in everyday conversation, but read formally.
Renminbi is sometimes referred to as the "redback", a play on "greenback", a slang term for the US dollar.
History
The various currencies called yuan or dollar issued in mainland China as well as Taiwan, Hong Kong, Macau and Singapore were all derived from the Spanish dollar, which China imported in large quantities from Spanish America from the 16th to 20th centuries. The first locally minted silver dollar or yuan accepted all over Qing dynasty China was the silver dragon dollar introduced in 1889. Various banknotes denominated in dollars or yuan were also introduced, which were convertible to silver dollars until 1935 when the silver standard was discontinued and the Chinese yuan was made fabi.The renminbi was introduced by the People's Bank of China in December 1948, about a year before the establishment of the People's Republic of China. It was issued only in paper form at first, and replaced the various currencies circulating in the areas controlled by the Communists. One of the first tasks of the new government was to end the hyperinflation that had plagued China in the final years of the Kuomintang era. That achieved, a revaluation occurred in 1955 at the rate of 1 new yuan = 10,000 old yuan.
In 2019, the People's Bank of China released an updated edition of the fifth series of renminbi banknotes and coins. The update included new versions of the ¥50, ¥20, ¥10, and ¥1 banknotes, as well as the ¥1, ¥0.5, and ¥0.1 coins. These featured improved security features, enhanced printing quality, and brighter coloration to combat counterfeiting and improve recognizability. Notably, the ¥100 banknote from the 2015 issue remained unchanged in this release.
As the Chinese Communist Party took control of ever larger territories in the latter part of the Chinese Civil War, its People's Bank of China began to issue a unified currency in 1948 for use in Communist-controlled territories. Also denominated in yuan, this currency was identified by different names, including "People's Bank of China banknotes", "New Currency", "People's Bank of China notes", "People's Notes", and finally "People's Currency", or "renminbi", from June 1949.
In the early 2020s, China launched the digital renminbi, also known as the digital yuan or e-CNY, a central bank digital currency developed by the People's Bank of China. Pilot programs began in 2020 in cities such as Shenzhen, Suzhou, and Chengdu. By 2023, e-CNY had been integrated into a wide range of applications, including public transportation, government subsidies, retail payments, and cross-border trials. The digital yuan is intended to enhance payment system resilience, offer an alternative to private payment platforms like Alipay and WeChat Pay, and support financial inclusion.
Era of the command economy
From 1949 until the late 1970s, the state fixed China's exchange rate at a highly overvalued level as part of the country's import-substitution strategy. During this time frame, the focus of the state's central planning was to accelerate industrial development and reduce China's dependence on imported manufactured goods. The overvaluation allowed the government to provide imported machinery and equipment to priority industries at a lower domestic currency cost than otherwise would have been possible.Transition to an equilibrium exchange rate
China's transition by the mid-1990s to a system in which the value of its currency was determined by supply and demand in a foreign exchange market was a gradual process spanning 15 years that involved changes in the official exchange rate, the use of a dual exchange rate system, and the introduction and gradual expansion of markets for foreign exchange.The most important move to a market-oriented exchange rate was an easing of controls on trade and other current account transactions, as occurred in several very early steps. In 1979, the State Council approved a system allowing exporters and their provincial and local government owners to retain a share of their foreign exchange earnings, referred to as foreign exchange quotas. At the same time, the government introduced measures to allow retention of part of the foreign exchange earnings from non-trade sources, such as overseas remittances, port fees paid by foreign vessels, and tourism.
As early as October 1980, exporting firms that retained foreign exchange above their own import needs were allowed to sell the excess through the state agency responsible for the management of China's exchange controls and its foreign exchange reserves, the State Administration of Exchange Control. Beginning in the mid-1980s, the government sanctioned foreign exchange markets, known as swap centres, eventually in most large cities.
The government also gradually allowed market forces to take the dominant role by introducing an "internal settlement rate" of ¥2.8 to 1 US dollar which was a devaluation of almost 100%.