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The legal tender of China is the Renminbi, which is literally translated as the people’s currency. It is the official currency of the People’s Republic of China, and the People’s Bank of China is officially responsible for issuing it. It is abbreviated as the RMB and its short official name is the CNY, or the China Yuan. In Chinese, it is known as the Ren Min Bi. The monetary unit of the Renminbi is the Yuan while the fractional units are the Jiao and the Fen.
The Renminbi has been officially recognized as the people’s currency for more than 50 years. It was balanced to the U.S. dollar for several years, but was officially unpegged from the U.S. dollar in 2005.
The history of the Renminbi is steeped in relatively recent times, as far as Chinese history is concerned. It was not until 1948 that the Renminbi was first issued, and from its beginnings, it came from the People’s Bank of China, which was under authorship of the Chinese Communist Party.
Back in these times, the Chinese Nationalist Party was entrenched in a civil war with the Chinese Communist Party, and at the time, each party had its own formal currency. The Renminbi was first issued as a way to help stabilize the economies in areas held by the Communist party, and is credited in modern Chinese history with helping the Chinese Communist Party work its way to victory.
The Chinese Nationalist party was defeated in 1949, and the new government of China tackled the high levels of inflation that had been present under the old government by optimizing and refining the new financial system and taking over the management of foreign exchange.
It is important to note that Hong Kong, Macau, and Taiwan each use a different currency than that on the Chinese mainland. Hong Kong uses the Hong Kong Dollar, Macau uses the Pataca, and Taiwan uses the New Taiwan Dollar. In colloquial speech, people are often likely to say kuai; this is the colloquial name of the Yuan. The colloquial name of the Jiao is the mao. The conversion between currencies is simple: 1 Yuan is 10 Jiao, which are 100 Fen.
The paper currencies primarily in use today in China are the 5 Jiao, 1 Jiao, 100 Yuan, 50 Yuan, 20 Yuan, 10 Yuan, and 1 Yuan. The most common coins used are the 5 Jiao and the 1 Yuan. It is important to know which denominations are frequently used in China as well as what these denominations look like, as there are a number of counterfeiters in China. Large notes such as 100 Yuan or 50 Yuan bills are naturally more likely to be counterfeited.
In China, money can usually be exchanged at four or five star hotels by guests, or at banks by everyone. It is necessary to have one’s passport in order to convert currency in China. In more remote areas, it is best to take money ahead of time due to the difficulty in finding currency exchange sites.