Renminbi and the Chinese Yuan - Facts and History of the Chinese Currency

by Samuel Xie, Ph.D.

1. Renminbi and the Chinese Yuan - The Current Legal Tender of China
2. Units of Renminbi, or the Chinese Yuan
3. Interesting Facts of Renminbi and the Chinese Yuan
4. Current Chinese Currency, or Renminbi on the Market
5. A Brief History of the Chinese Currency

Renminbi and the Chinese Yuan - The Current Legal Tender of China

Renminbi, literally translated as "the people's currency", is currently the official currency, or the legal tender of the People's Republic of China.  It is also known as the Chinese Yuan (CNY) and by the symbol "¥". 

Units of Renminbi, or the Chinese Yuan

Units: Yuan, colloquially as Kuai; Jiao, colloquially as Mao; and Fen. 

1 Yuan (Kuai) = 10 Jiao (Mao); 1 Jiao (Mao) = 10 Fen

Interesting Facts of Renminbi and the Chinese Yuan

1. Future Major Currency? The Renminbi, or the Chinese Yuan will become one of the major currencies in the world when it floats on the market, according to Jim Rogers, one of the most famous investors in the world.

2. Its Appreciation Power. In 1989, the Renminbi had an exchange rate of 13.5 RMB to 1 US dollar on the black market.  The current rate as of October 2010, 6.69RMB to 1 US dollar.

3. Its Domestic Inflation. In the late 1970's, 10 fen could purchase 1 kilograms of crabs in China.  Now, it takes about 100 Yuan.  The prices rose over 1000 times over the 40 year period.

4. The Chinese Character. The "Yuan" in Chinese Yuan, "Yen" in Japanese Yen, and "Won" in Korean Won all have the same meaning, which means "round".  They have the same root.

5. Its International Presence. Not long ago, it was illegal to bring large amounts of Chinese Renminbi to outside of China.  Now, it is generally accepted in Southeast Asia even though it is yet to be floated on the market.  However, people can trade RMB futures on the Chicago Mercantile Exchange.

Current Chinese Currency, or Renminbi on the Market

Renminbi Notes (Currently Used in China)
Front	Back
100 Yuan	100 Yuan
100 Yuan (old series, but still seen in China)	100 Yuan (old series, but still seen in China)
50 Yuan	50 Yuan
50 Yuan (old series, but still seen in China)	50 Yuan (old series, but still seen in China)
20 Yuan	20 Yuan
10 Yuan	10 Yuan
10 Yuan (old series, but still seen in China)	10 Yuan (old series, but still seen in China)
5 Yuan	5 Yuan
5 Yuan (old series, but still seen in China)	5 Yuan (old series, but still seen in China)
2 Yuan	2 Yuan
1 Yuan	1 Yuan
1 Yuan (old series, but still seen in China)	1 Yuan (old series, but still seen in China)
5 Jiao	5 Jiao
2 Jiao	2 Jiao
1 Jiao	1 Jiao

A Brief History of the Chinese Currency

1500 BC to 1000 BC: China used cowry shells as a form of currency.

1500 BC to 1046 BC: China used bronzed shells as a form of currency

900 BC: First metal coins were invented in China.

500 BC to 221 BC: bronze objects of shapes of a spade or a knife were used as coins.

221 BC to 210 BC: As part of the unification of China, a uniform copper coin was used as a national currency during the Qin Dynasty.

210 BC to 960 AD: Various of metal coins made of copper, iron, or lead were used in China as currencies.  During certain time of this period, because of lack of management or poor decision making of the emperors, people were allowed to make their own coins, thus causing major inflation and disruption of the functions of the currencies.

960 AD to 1279 AD: First paper form of currency was used starting with promissory notes called "flying money"   The state took over the production of the paper form of money in 1024.

1271 AD to 1368 AD: The Mongolian Yuan Dynasty created a national system of paper currency not backed by silver or gold.  It was the world's first fiat currency.   However, the inflation in 1260 caused the government to replace the existing paper currency with a new paper currency in 1287, but inflation caused by undisciplined printing remained a problem for the Yuan court until the end of the Dynasty in 1368.

1368 AD to 1644 AD: A form of paper currency experienced rapid inflation and issues were suspended in 1450 although notes remained in circulation until 1573.  In 1423 AD, silver, flowed in from overseas, became a legal tender for payment of taxes.  Most of the silver came from Latin America.

1644 AD to 1889 AD: China used a silver and a copper currency system.  Paper from of promissory notes were also used during this period.  Shanxi Province was one of the financial centers in China.

1889 AD to 1910 AD: The Chinese Yuan was introduced at par with the Mexican Peso.