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Renminbi
*** Shopping-Tip: Renminbi
Image:ChinaPRP901-100Yuan-1999_a.jpg 300px|thumb|100 Renminbi Yuan issued in 1999
The '''renminbi''' ({{zh-stpl|t=人民幣|s=人民å¸?|l=people's currency|p=rénmÃnbì}}) is the official
currency in the
mainland China mainland of the
People's Republic of China (PRC). It is issued by the
People's Bank of China, the monetary authority of the PRC. The official
ISO 4217 abbreviation is CNY, although also commonly abbreviated against ISO standard as "RMB".
Exchange rate
Mainland China's currency, which for the previous decade had been tightly pegged at 8.28 renminbi to the
United States dollar U.S. dollar, was revalued on
July 21,
2005 to 8.11 per U.S. dollar, following the removal of the peg to the US dollar and pressure from the United States. The People's Bank of China also announced that the renminbi would be pegged to a
basket (finance) basket of foreign currencies, rather than being strictly tied to the U.S. dollar, and would trade within a narrow 0.3 percent band against this basket of currencies. The PRC has stated that the basket is dominated by the
United States dollar U.S. dollar,
euro,
yen Japanese yen and
South Korean won, with a smaller proportion made up of the
Pound sterling British pound,
Thailand Thai thai baht baht,
Russian ruble,
Australian dollar,
Canadian dollar and
Singapore dollar.
Purchasing power
The
World Bank's ''World Development Indicators 2005'' estimates that 1
United States dollar is equivalent to approximately 1.8 Renminbi by
purchasing power parity in 2003. [http://devdata.worldbank.org/wdi2005/Table5_7.htm]
Renminbi units
The base unit of the renminbi is the ''
yuan''. As with
Chinese numerals, this character has two forms — a common simplified form (元) and a formal form (圆/圓) used to prevent alterations and accounting mistakes. One ''yuan'' is divided into 10 ''jiao'' (角), and one ''jiao'' is divided into 10 ''fen'' (分). So 3.45 yuan would be spoken of as "3 ''yuan'' 4 ''jiao'' 5 ''fen''", as opposed to "3 ''yuan'' 45 ''fen''". In colloquial usage, other names are frequently employed; see ''
yuan'' for details.
The largest denomination of the renminbi is the 100-''yuan''
banknote note. The smallest is the 1-''fen''
coin or note. One of the more interesting things to note is that all denominations are available as banknotes. The ''fen'' notes are now rather insignificant, and the design has not changed since
1953.
The word ''yuan'' is the usual translation for the word ''dollar'', and the abbreviation RMBÂ¥ is sometimes written as CN$.
Yuan in
Chinese language Chinese literally means a "'''round object'''" or "'''round coin'''". The Korean and Japanese currency names,
Won and
Yen respectively, have the same
Chinese character (
hanja/
kanji) representation, but in different forms (respectively, �/圓 and 円), also meaning '''round''' in
Korean language Korean and
Japanese language Japanese. However, they do not share the same names for the aforementioned subdivisions.
Although shop prices in the PRC are usually marked with å…ƒ after the digits, a Y with one crossbar (Ò°) (before the digits) is also common.
The Y with one crossbar is represented by the same
Unicode code point (Â¥) as the Japanese
yen although the Japanese symbol tends to have two crossbars.
RMB Series
The denomination of each banknote is given in
Chinese language Chinese. The numbers themselves are given in financial
Chinese numeral characters, as well as
Hindu-Arabic numerals. The denomination and the words 'China People's Bank' are also given in
Mongol language Mongol,
Tibetan language Tibetan,
Uyghur language Uyghur and
Zhuang language Zhuang on the back of each banknote. On the front of the note is also the representation of the denomination in Chinese
Braille starting from the 4th series.
The use of coins varies from places to places. For example, coins are more often used for values less or equal to ¥1 in
Shanghai, but banknotes of the lower value are more often used than coins in
Beijing.
1st series
{{main|First series of Renminbi banknotes}}
The first series of Renminbi banknotes was introduced during the
Chinese Civil War by the newly-founded
People's Bank of China on
December 1,
1948, nearly one year before the founding of the
People's Republic of China itself. It was issued to unify and replace the various currencies of the communist-held territories as well as the currency of the Nationalist government.
Due to the turbulent political situation at the time, the 1st series is rather chaotic, with many versions issued for each denomination. The banknotes show a mixture of agricultural and industrial scenes, modes of transportation, and famous sites.
The notes were issued in twelve denominations: ¥1, ¥5, ¥10, ¥20, ¥50, ¥100, ¥200, ¥500, ¥1,000, ¥5,000, ¥10,000 and ¥50,000, with a total of 62 designs.
2nd series
{{main|Second series of Renminbi banknotes}}
The second series of Renminbi banknotes was introduced on
March 1,
1955. Together with the introduction of the 2nd series, the decimal point was moved 4 places to the right. As a result, one 1st series ¥10,000 note is equivalent to one 2nd series ¥1 note.
Each note has the words "People's Bank of China" as well as the denomination in the
Uyghur language Uyghur,
Tibetan language Tibetan,
Mongol language Mongol and
Zhuang language Zhuang languages on the back, which has since appeared in each series of Renminbi notes.
The denominations available were: ¥0.01, ¥0.02, ¥0.05, ¥0.1, ¥0.2, ¥0.5, ¥1, ¥2, ¥3, ¥5 and ¥10. The ¥3, ¥5 and ¥10 notes were printed in the
Soviet Union. As a result of the
Sino-Soviet split, the use of them was halted in 1964.
Since 1999, only the three ¥0.01, ¥0.02, and ¥0.05 banknotes continue to be legal tender. These three notes are very small compared to other banknotes.
3rd series
{{main|Third series of Renminbi banknotes}}
The third series of Renminbi bankotes was introduced on
April 15,
1962. For the next two decades, the 2nd and 3rd series banknotes were used concurrently.
The denominations available were: ¥0.1, ¥0.2, ¥0.5, ¥1, ¥2, ¥5 and ¥10. The 3rd series was phased out over the 1990's and recalled completely in 2000.
4th Series
{{main|Fourth series of Renminbi banknotes}}
The 4th series was introduced between
1987 and
1992, although the banknotes were dated
1980,
1990, or
1996. Unlike the 3rd series, they are still legal tender. Banknotes are available in ¥0.1, ¥0.2, ¥0.5, ¥1, ¥2, ¥5, ¥10, ¥50, and ¥100, and coins in ¥0.1, ¥0.5, and ¥1.
Banknotes less or equal to ¥10 feature different
Nationalities of China ethnicities of China on obverse and
Geography of China on reverse. ¥50 features an Intellectual, a farm girl, and an industrial male, a typical communist theme, on the obverse, and ¥100 features 4 people important to the founding the People's Republic of China:
Mao Zedong,
Zhou Enlai,
Liu Shaoqi, and
Zhu De. Both the higher value notes feature
Geography of China on reverse.
Coins carry the
Emblem of the People's Republic of China, the full title of the state in
Chinese language Chinese and
pinyin on obverse, and the value and a flower on reverse.
5th Series
{{main|Fifth series of Renminbi banknotes}}
Image:Yuan_collection.jpg right|150px|Collection of Chinese Yuan (Renminbi) paper currency.
In 1999, a new series of Renminbi banknotes and coins were progressively introduced.
=First (1999) Edition
=
Coins of the first edition replaces all 3 values from the previous series, namely ¥0.1, ¥0.5, and ¥1. It should be noted that the
Emblem of the People's Republic of China of the previous series has been removed and the title of the state has been replaced "
People's Bank of China". 1 jiao (Â¥0.1) also shrunk in size.
The first edition includes the following banknotes
{|class="wikitable" style="font-size: 90%"
!colspan=9|Banknote
|-
!colspan=9|5th Series, First (1999) Edition
|-
! Link {{zh icon}}!! Denomination !! Dimensions !! Dominant Color !! Obverse !! Reverse !! Printed Date !! Issued Date !! Watermark
|-
| []|| ¥1 ||
|-
| [http://www.pbc.gov.cn/detail.asp?col=1113&ID=37] || ¥5 || 135 x 63 mm || Purple ||
Mao Zedong and
Narcissus (flower) Narcissus ||
Mount Tai .html">1999
|_November 18,
2002 .html">Narcissus (flower)
Narcissus
|-
| [http://www.pbc.gov.cn/detail.asp?col=1113&ID=32] || ¥10 || 140 x 70 mm || Blue ||
Mao Zedong and
Rose .html">Three Gorges
Three Gorges of the Yangtze River ||
September 1,
2001 ||
Rose
|-
| [http://www.pbc.gov.cn/detail.asp?col=1113&ID=38] || ¥20 (new value)|| 145 x 70 mm || Brown ||
Mao Zedong and
Lotus .html">Guilin
Scenery of Guilin ||
October 16,
2000 ||
Lotus
|-
| [http://www.pbc.gov.cn/detail.asp?col=1113&ID=36] || ¥50 || 150 x 70 mm || Green ||
Mao Zedong and
Chrysanthemum .html">Potala Palace
| September 1,
2001 ||
Mao Zedong
|-
| [http://www.pbc.gov.cn/detail.asp?col=1113&ID=39] || ¥100 || 155 x 77 mm || Red ||
Mao Zedong and
Peony? .html">Great Hall of the People
| October 1,
1999 ||
Mao Zedong
|}
The new banknotes incorporate several measures to foil
counterfeiting, including
watermarks and inks that
fluoresce under
ultraviolet light. All but the CNY 1 banknote have a metallic strip, and the CNY 50 and CNY 100 banknotes also feature numbers which change colour when viewed from different angles. The portrayals of different
nationalities of China, represented by a couple in ethnic dress on the front of previous banknotes, have also been uniformly replaced with the image of
Mao Zedong.
The ¥1 note, introduced on
July 30,
2004, could be argued as either a member of the first edition or the second edition.
Reasons for the first edition:
* Dated
1999
* Same legal basis as the first edition
* It is the only one edition of the ¥1 note
Reasons for the second edition:
* Shared many new anti-counterfeit devices with the second edition (see below)
{|class="wikitable" style="font-size: 90%"
!colspan=9|Banknote
|-
!colspan=9|5th Series, ¥1
|-
! Link {{zh icon}}!! Denomination !! Dimensions !! Dominant Color !! Obverse !! Reverse !! Printed Date !! Issued Date !! Watermark
|-
| [http://www.pbc.gov.cn/detail.asp?col=1113&ID=41] || ¥1 || 130 x 63 mm || Yellow ||
Mao Zedong and
Orchid .html">West Lake
Three Pools Mirroring the Moon at West Lake ||
1999 .html">July 30,
2004 | Orchid
|}
=Second (2005) Edition
=
'''The 2005 Edition''' was introduced since
August 31,
2005 with the following banknotes and coin affected:
* banknotes: ¥100, ¥50, ¥20, ¥10 and ¥5
* coins: ¥0.1
The style of those new banknotes and coins follows generally, with increased counterfeiting features. The differences in banknotes with the 1999 edition are
* Dated
2005
* The currency number at the bottom of the reverse is added with '''“YUAN�''' indicating the
pinyin of “dollar�(圓) in
Chinese language.
* Added
EURion constellation to avoid computer-aided
counterfeit
* Removal of fiber threads
* Removal of the second serial number on ¥50 and ¥100
* More raised ink printing (on the right side of obverse)
* Move of registration
The material of the new CNY 0.1 coin is
stainless steel, switching from
duralumin, a kind of metal
alloy.
The images can be found at these URLs of the official website {{zh icon}}: ¥0.1: [http://www.pbc.gov.cn/detail.asp?col=1118&ID=152], ¥5: [http://www.pbc.gov.cn/detail.asp?col=1118&ID=151], ¥10: [http://www.pbc.gov.cn/detail.asp?col=1118&ID=150], ¥20 [http://www.pbc.gov.cn/detail.asp?col=1118&ID=149], ¥50 [http://www.pbc.gov.cn/detail.asp?col=1118&ID=148], ¥100 [http://www.pbc.gov.cn/detail.asp?col=1118&ID=147].
Possible future design
On March 13, 2006, [http://news.bbc.co.uk/2/hi/asia-pacific/4801486.stm BBC reported] that some delegates to an advisory body at the
National People's Congress proposed to include
Sun Yat-sen and
Deng Xiaoping on the Renminbi banknotes. However the proposal is a long way from becoming law.
History
The renminbi was first issued shortly before the
Chinese Civil War takeover of the mainland by the Communists in 1949. One of the first tasks of the new communist government was to end the
hyperinflation that had plagued China near the end of the
Kuomintang era. A revaluation occurred in
1955 at the rate of 1 new yuan = 10,000 old yuan.
During the era of the
command economy, the value of the RMB was set to unrealistic values in exchange with western currency and severe currency exchange rules were put in place. With the opening of the mainland Chinese economy in 1978, a
dual track currency system was instituted, with renminbi usable only domestically, and with foreigners forced to use
foreign exchange certificates. The unrealistic levels at which
exchange rates were pegged led to a strong
black market in currency transactions.
In the late 1980s and early 1990s, the PRC worked to make the RMB more convertible. Through the use of
swap centers, the exchange rate was brought to realistic levels and the dual track currency system was abolished.
The RMB is convertible on
current accounts, but not
capital accounts. The ultimate goal has been to make the RMB fully convertible. However, partly in response to the
Asian financial crisis in
1998, the PRC has been concerned that the mainland Chinese financial system would not be able to handle the potential rapid cross border movements of
hot money, and as a result, as of 2003, full convertibility remains a distant goal.
Exchange rate of the U.S. dollar vs. the renminbi
From 1994 until July 2005, the policy on currency has been to peg informally the value of the renminbi against the value of the
United States dollar. This policy was praised during the
Asian financial crisis of 1998 as it prevented a round of competitive devaluations.
In 2003, this policy came under criticism by the United States. The fall in the value of the dollar caused the value of the renminbi to fall also, making mainland Chinese exports more competitive. This led to some pressure on the PRC from the
United States to increase the value of the RMB in order to encourage imports and decrease exports. This is a policy that some feel would preserve manufacturing jobs in the United States and a smaller trade deficit with mainland China. The
G7 and
European Union are also in favour of a re-evaluation of the exchange rate.
The PRC government has resisted pressure to increase the value of the RMB, out of concern that it would cause mainland Chinese jobs to disappear and would also expose domestic banks to currency risks that they are not prepared to handle. Many economists believe that only
fixed exchange rates or
floating exchange rates are stable over the long term, because a one-time change in exchange rates might cause
Speculation speculators in the future to take positions on possible exchange rate fluctuations which would lead to pressure to completely float the currency.
The PRC government has also claimed that, while mainland China runs a large surplus with respect to the United States, its overall
balance of payments is not out of balance.
Some independent analysts conclude that mainland Chinese currency is undervalued, because the People's Republic forbids citizens from moving more than 10,000 RMB abroad. If this sort of
financial diversification were allowed, the massive outflow of yuan could have a substantial effect on the currency.
Within the United States, the issue of appreciating the RMB is also controversial.
Manufacturing Manufacturers and
textile producers are in favor of appreciating the RMB. However, many American companies that depend on mainland Chinese factories to supply inexpensive products and components, such as
Aerospace engineering aerospace companies, computer manufacturers, discount retailers, and other companies are against appreciating the RMB. Furthermore, many economists have pointed out that manufacturing jobs have been declining in the United States for decades. Some people have suggested that blaming the lack of job growth on the value of the RMB is merely a convenient misdirection on the part of the vested interests, including the
George W. Bush administration, inefficient businesses, and
Trade union labor unions fearful of competition.
However, the potential risk to global balances from mainland China’s inflexible exchange rate would be more critical if the PRC relaxed its controls on short-term investment flows without first introducing exchange rate flexibility. This is because shifting exchange rates nullify expected profits from investment flows seeking to take advantage of higher interest rates in another country. Without flexibility, speculative flows could quickly become large, as they did during the Asian financial crisis, and threaten economic stability and orderly world trade.
See also
*
Hong Kong dollar
*
Macanese pataca
*
New Taiwan dollar
External links
-
Banknotes of China
-
SinoBanknote
-
Photographs of all Chinese currency and sound of pronunciation in Chinese
-
What is the new Chinese currency regime?
-
Economist article on Chinese currency valuation
-
Discussion on how the basket peg works
-
Buy Chinese Yuan?
-
China Severs Its Currency's Link to Dollar,
Washington Post,
21 July 2005
-
China lifts currency basket lid, BBC,
10 August 2005
{{AsianCurrencies}}
Category:Economy of the People's Republic of China
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