Renminbi

2007 Schools Wikipedia Selection. Related subjects: Currency

The renminbi ( Simplified Chinese: 人民币; Traditional Chinese: 人民幣; pinyin: rénmínbì; literally "people's currency") or the yuan ( Simplified Chinese: 元 or 圆; Hanyu Pinyin: yuán; Wade-Giles: yüan) is the official currency in the 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 as "RMB". The Latinised symbol is ¥.

History

The renminbi was first issued shortly before the 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.

Yuan and other 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.

Yuan is a one syllable word and in Chinese literally means round, after the round shape of ancient Chinese coins by the same name. The Korean and Japanese currency names, won and yen respectively, are cognates of the yuan and have the same Chinese character ( hanja/ kanji) representation, but in different forms (respectively, 원/圓 and 円/圓), also meaning round in Korean and Japanese. However, they do not share the same names for the subdivisions (fen, jiao).

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. Yuan is also commonly translated into English simply as the "dollar."

Although shop prices in the PRC are usually marked with 元 after the digits, a Y with one (Ұ) or two crossbars (¥) before the numeral digits is also common. Some people using an American keyboard may type CN$ out of convenience for the ¥ symbol.

The largest denomination of the renminbi is the 100-yuan 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. Since sales tax in China are included in the prices, the fen and jiao have become increasingly unnecessary as prices increase. Chinese retail prices also tend to avoid decimal values (such as $9.98), opting instead for integer values of yuan (such as ¥9 or ¥10).

RMB series

The denomination of each banknote is given in Chinese. The numbers themselves are given in financial Chinese numeral characters, as well as Arabic numerals. The denomination and the words 'China People's Bank' are also given in Mongol, Tibetan, Uyghur and 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 fourth 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.

First series

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 ceased on May 10, 1955. 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 first 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.

Images of Reminbi First Series Banknotes

		Front design: a worker and a peasant Main color of Front: blue and pink Back design: decorative pattern Main colour of Back: light coffee Size: 133 mm * 54 mm
		Front design: factory Main color of Front: light blue and reddish blue Back design: decorative ball Main colour of Back: pale purple Size: 116 mm * 56 mm

Second series

The second series of Renminbi banknotes was introduced on March 1, 1955. Together with the introduction of the second series, the decimal point was moved 4 places to the right. As a result, one first series ¥10,000 note is equivalent to one second series ¥1 note.

Each note has the words "People's Bank of China" as well as the denomination in the Uyghur, Tibetan, Mongol and Zhuang languages on the back, which has since appeared in each series of Renminbi notes.

The denominations available were (withdrawn date):

• ¥0.01, ¥0.02, ¥0.05,
• ¥0.1(15/12/1967),
• ¥0.2(11/1953),
• ¥0.5(1/1/1999),
• ¥1 red(20/10/1969) blue(issued:25/3/1961, withdrawn 15/8/1973) ,
• ¥2(12/1976), ¥3(15/5/1964),
• ¥5 red(15/5/1964) blue(issued period:20/4/1962-1/12/1983) and
• ¥10(issued period:1/12/1957-15/4/1964).

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 to be withdrawn.

Since 1999, only the three ¥0.01, ¥0.02, and ¥0.05 banknotes continue to be legal tender. The sizes of these three notes are very small compared to other banknotes.

Third series

The third series of Renminbi banknotes was introduced on April 15, 1962. For the next two decades, the second and third series banknotes were used concurrently.

The denominations available with either of these catalog number(issued date-withdrawn date) added:

• ¥0.1 3|1(20/4/1962-20/11/1971), 3|2(31/10/1966-12/1067) 3|3-6(15/12/1967),
• ¥0.2 (15/4/1964),
• ¥0.5 (5/1/1974),
• ¥1 (20/10/1969),
• ¥2 (15/4/1964),
• ¥5 (20/10/1969),
• ¥10 (10/1/1966).

The third series was phased out over the 1990s and recalled completely on the 1/7/2000, this date is valid for all of the denominations with only one date provided.

Fourth series

The fourth series was introduced between 1987 and 1992, although the banknotes were dated 1980, 1990, or 1996. Unlike the third series, they are still legal tender. Banknotes are available in (issue date):

• ¥0.1(22/9/1988),
• ¥0.2 (10/5/1988),
• ¥0.5 (27/4/1987),
• ¥1 (10/5/1988),
• ¥2 (10/5/1988),
• ¥5 (22/9/1988),
• ¥10 (22/9/1988),
• ¥50' (27/4/1987), and
• ¥100 (10/5/1988), .

and newly deisgned coins of ¥0.1, ¥0.5, and ¥1.

All of the banknotes feature geographical features of China on the reverse side. On the obverse side, banknotes less or equal to ¥10 feature different ethnicities of China; the ¥50 note features an intellectual, a farmer, and an industrial worker, a typical communist theme; while the ¥100 note features four people important to the founding the People's Republic of China: Mao Zedong, Zhou Enlai, Liu Shaoqi, and Zhu De.

Coins carry the Emblem of the People's Republic of China, the full title of the state in Chinese and pinyin on the obverse side, and the denomination and an image of a flower on the reverse side.

Fifth series

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 (¥0.1) also shrunk in size.

The first edition includes the following banknotes

Banknote
5th Series, First (1999) Edition
Link (Chinese)	Value	Dimensions	Colour	Obverse	Reverse	Printed Date	Issued Date	Watermark
	¥1	130 x 63 mm	Yellow	Mao Zedong and Orchid	Three Pools Mirroring the Moon at West Lake	1999	July 30, 2004	Orchid
	¥5	135 x 63 mm	Purple	Mao Zedong and Narcissus	Mount Tai		November 18, 2002	Narcissus
	¥10	140 x 70 mm	Blue	Mao Zedong and Rose	Three Gorges of the Yangtze River		September 1, 2001	Rose
	¥20 (new value)	145 x 70 mm	Brown	Mao Zedong and Lotus	Scenery of Guilin		October 16, 2000	Lotus
	¥50	150 x 70 mm	Green	Mao Zedong and Chrysanthemum	Potala Palace		September 1, 2001	Mao Zedong
	¥100	155 x 77 mm	Red	Mao Zedong and Peony?	Great Hall of the People		October 1, 1999

Note:

• ↑  The ¥1 note, introduced on July 30, 2004, can also be argued as a member of the second edition because it shares similar new security features that are introduced in the banknotes of the second (2005) edition.

The new banknotes incorporate several measures to foil counterfeiting, including watermarks and inks that fluoresce under ultraviolet light. All but the ¥1 banknote have a metallic strip, and the ¥50 and ¥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.

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

There is no difference in the basic colour and design between the banknotes of the 1999 and 2005 edition. However, new security (anti-counterfeit) features are added in the 2005 edition that distinguishes the two. The differences as compared to 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 fibre 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 ¥0.1 coin ( image) is stainless steel, switching from duralumin, a kind of metal alloy.

Banknotes of the second (2005) edition include

Banknote
5th Series, Second (2005) Edition
Link (Chinese)	Value	Dimensions	Colour	Obverse	Reverse	Printed Date	Issued Date	Watermark
	¥5	135 x 63 mm	Purple	Mao Zedong and Narcissus	Mount Tai	2005	August 31, 2005	Narcissus
	¥10	140 x 70 mm	Blue	Mao Zedong and Rose	Three Gorges of the Yangtze River			Rose
	¥20	145 x 70 mm	Brown	Mao Zedong and Lotus	Scenery of Guilin			Lotus
	¥50	150 x 70 mm	Green	Mao Zedong and Chrysanthemum	Potala Palace			Mao Zedong
	¥100	155 x 77 mm	Red	Mao Zedong and Peony Bauhinia ?	Great Hall of the People

Possible future design

On March 13, 2006, 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.

Exchange rate

Mainland China's currency, which for the previous decade had been tightly pegged at 8.28 renminbi to the 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 of foreign currencies, rather than being strictly tied to the U.S. dollar, and would trade within a narrow 0.3% band against this basket of currencies. The PRC has stated that the basket is dominated by the U.S. dollar, Euro, Japanese yen and South Korean won, with a smaller proportion made up of the British pound, Thai baht, Russian ruble, Australian dollar, Canadian dollar and Singapore dollar.

Purchasing power

The World Bank's World Development Indicators 2005 estimates that one United States dollar is equivalent to approximately 1.8 Renminbi by purchasing power parity in 2003.

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