Anyone planning a trip or business venture needs to understand what is the currency called in china before arriving in the country. The official legal tender is the Renminbi, which is often abbreviated as RMB and managed by the People’s Bank of China. While travelers might hear the term Yuan used frequently, it is technically a unit of the Renminbi, similar to how a Pound is a unit of British Sterling. This currency is not allowed to float freely on the global market and is instead controlled by the Chinese government, which maintains a specific exchange rate relative to a basket of foreign currencies.
The Official Designation: Renminbi vs. Yuan
To answer the question "what is the currency called in china" accurately, one must distinguish between Renminbi and Yuan. The Renminbi (RMB) is the official name of the national currency, translating to "People's Currency." The Yuan (CNY) is the base unit, much like the Dollar is the base unit for the US currency. In everyday transactions within China, people refer to prices and exchange rates in Yuan, making it the most common term heard on the streets of Beijing or Shanghai.
Digital Currency: e-CNY
In recent years, the landscape of what is the currency called in china has evolved with the introduction of the Digital Yuan, or e-CNY. This is a digital form of the Renminbi issued directly by the People’s Bank of China. Unlike cryptocurrencies, it is not decentralized but functions as legal tender in a digital format. Major cities are currently testing this system, allowing residents to use a digital wallet app to pay for goods and services without the need for traditional banking infrastructure.
Exchange Rates and Global Context
The value of the Chinese currency is determined differently than free-floating currencies like the US Dollar or Euro. The People’s Bank of China sets a reference rate each day and allows the currency to fluctuate within a narrow band. This managed float means that the RMB does not swing wildly in value overnight, providing some stability for international trade. When checking what is the currency called in china against your home currency, you will notice it is often pegged closely to the US Dollar, although the basket of currencies it references is more diversified.
Practical Usage for Travelers
For tourists, understanding the practical side of the currency is essential. While large international hotels and airports might accept US Dollars or credit cards, the standard practice everywhere else is to use Renminbi. It is common to see prices listed in Yuan, and attempting to pay in foreign currency could result in confusion or an unfavorable exchange rate. Therefore, ensuring you have physical RMB or access to ATMs is crucial for a smooth experience.
Physical Banknotes and Coins
The physical form of what is the currency called in china comes in a distinct set of banknotes and coins. Banknotes are available in denominations of 1, 5, 10, 20, 50, and 100 Yuan. Coins are generally issued in 1 Yuan, 5 Yuan, and 1 Jiao (which equals 0.1 Yuan) denominations. The designs feature significant historical and cultural figures, such as Mao Zedong on the front of most notes, alongside architectural landmarks like the Great Temple of Heaven.
International Transactions and Trade
On the global stage, the Renminbi is increasingly being used for international settlements. Countries that trade heavily with China often hold RMB reserves as part of their foreign exchange holdings. This globalization of the currency is a recent development, aimed at reducing reliance on the US Dollar for trade between China and its partners. Understanding this shift is important for anyone asking what is the currency called in china in a modern economic context.
Summary of Key Identifiers
To summarize the essential facts about the Chinese currency, the following points clarify the common identifiers and usage:
Official Name: Renminbi (RMB)
