What is the Chinese Yuan Renminbi (CNY)? Basic information about the Chinese Yuan Renminbi Pound currency

Description

The Chinese yuan renminbi (simplified Chinese: 人民币), or CNY, which means ‘people’s currency’, is the official currency of the People’s Republic of China. The term ‘renminbi’ refers to the name of the currency while ‘yuan’ refers to the basic unit of the Chinese currency. The symbol of the renminbi is ¥. As it is shared with the Japanese yen (JPY), CN¥ is sometimes used to distinguish the Chinese yuan renminbi from the yen.

The renminbi, introduced in 1948, is abbreviated as RMB but it is not an official currency code. Markets located in Hong Kong that trade the Chinese currency at free-floating rates use another unofficial code – CNH. The RMB acts as one of the most-held reserve currencies in the world, while being the eighth most-traded currency globally.

One yuan (Chinese: 元) is divided into ten jiao (Chinese: 角) and one jiao can be further divided into 10 fen (Chinese: 分). The notes of China’s currency are issued by China’s central bank, the People’s Bank of China (PBOC), in 10 denominations: ¥0.1, ¥0.2, ¥0.5, ¥1, ¥2, ¥5, ¥10, ¥20, ¥50 and ¥100. The renminbi coins come in 6 denominations: ¥0.01, ¥0.02, ¥0.05, ¥0.1, ¥0.5 and ¥1.

Economy

  • The People’s Republic of China has a market-oriented economy, with the service sector accounting for almost 52 percent of the total gross domestic product (GDP).
  • In 2020, China was the second largest national economy by nominal GDP, with the country’s GDP being estimated at over US$14 trillion.
  • It is forecasted that the People’s Republic of China will become the largest economy by nominal GDP in the world by 2028.
  • The People’s Republic of China is the largest manufacturer and exporter of goods, while ranking as the second largest importer of goods in the world.
  • Export products include textiles, steel, iron, medical equipment, data processing, electrical goods and other machinery.
  • Import products are plastics, metal ores, organic chemicals, oil and mineral fuels and medical equipment.
  • In 2020, China ranked as the world’s largest labour force with 778 million workers, having the unemployment rate estimated at 4 percent.
  • Since the Chinese government began its economic reforms in 1978, China has been the fastest growing major economy globally with growth rates averaging 10 percent over 30 years.
  • Four of the world’s top 10 most competitive financial centres, Shanghai, Hong Kong, Beijing, and Shenzhen, belong to the People’s Republic of China.
  • Three of the 10 largest stock exchanges in the world, Shanghai, Hong Kong, and Shenzhen, are located in China.
  • In 2020, 129 of the largest companies in the Fortune Global 500 were headquartered in China.
  • The People’s Republic of China holds the world’s largest foreign exchange reserves worth $3.1 trillion.

History

  • In 1948, the first edition of the Chinese yuan renminbi was introduced by the People’s Bank of China, with the RMB issued in banknotes only.
  • In 1955, a revaluation happened, resulting in the introduction of the new yuan renminbi at the exchange rate of 1 new yuan to 10,000 old yuan.
  • Since the 1950s, numerous series of the Chinese currency have been issued, having their own banknotes and coins.
  • In 1978, the dual track currency system was implemented, with the Chinese yuan renminbi being used only domestically. Therefore foreigners had to use exchange certificates, which led to a strong black market.
  • In the 1990s, the dual track currency system was abandoned.
  • From 1997 to 2005, the Chinese currency was pegged to the US dollar at the exchange rate of approximately 1 USD to 8.3 CNY.
  • Since 2006, the Chinese yuan renminbi has had a floating exchange rate.

Trivia

  • The word ‘yuan’ means ‘round’.
  • The ‘redback’ is a nickname for the Chinese yuan renminbi, similarly to the slang term for the US dollar – ‘greenback’.
  • China’s central bank announced in 2019 that a digital renminbi, also called DCEP (Digital Currency Electronic Payment) was going to be released soon. However, China’s digital currency won’t be based on cryptocurrency.
Symbols¥, CN¥
NicknamesRedback
ISO 4217 codeCNY
Central bankPeople’s Bank of China
Currency subunitsJiao = 1/10 of the yuan
Fen = 1/100 of the yuan
DenominationsBanknotes: ¥0.1, ¥0.2, ¥0.5, ¥1, ¥2, ¥5, ¥10, ¥20, ¥50, ¥100
Coins: ¥0.01, ¥0.02, ¥0.05, ¥0.1, ¥0.5, ¥1.
Countries using this currencyPeople’s Republic of China (Mainland China)
Currencies pegged to CNYNone
CNY is pegged toBasket of international currencies