Money in China: History, Currency, and Trends

China has a long and complex history with money, dating back to the earliest forms of currency in the Zhou Dynasty around 1046 BC.

The first paper money was introduced in China during the Tang Dynasty in 1023 AD, with the first coins minted in the 7th century BC.

The Chinese currency, the renminbi (RMB), is also known as the yuan (CNY) and is subdivided into 10 jiao or 100 fen.

The People's Bank of China is the central bank and is responsible for managing the country's monetary policy and regulating the financial system.

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The People's Bank of China introduced the Renminbi in December 1948, just under a year before the establishment of the People's Republic of China in October 1949.

Initially, only bank notes were issued and they began to circulate in areas of Communist-controlled China. This move aimed to end the hyper-inflation that had been a problem during the final years of the Republic of China.

In 1955, the yuan was revalued: 1 new yuan was equal to 10,000 old yuan. This significant change marked a new era for the Chinese currency.

The earliest form of Chinese money was shells, which were later bronzed.

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The earliest form of Chinese money was shells, which were later bronzed. These shells were the foundation of China's monetary system.

In the period of rival states, different shapes of money were used by different states, including knife-shaped, spade-shaped, and ant-nose-shaped coins. The Qin state's round coins with a square hole in the middle became the standard form of currency.

Round coins with a square hole in the middle were used until around 1890, and this form of currency is still seen as a symbol of wealth and prosperity today. These coins were introduced by Qin Shihuang, the First Emperor, when he united China in 221 BC.

For higher-level transactions, ingots of silver were commonly used, resembling the classic origami boat children enjoy folding out of paper.

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The Early-Modern Era was a time of accidental innovation in Chinese banking. A successful dyer with a branch office in Beijing started lending money to friends, collecting the same amount from his office in Beijing to help them avoid bandits.

This idea quickly caught on, and the hometown of the dyer, Pingyao, became a major financial center in China. Pingyao's attractive and well-preserved walled town in Shanxi province played host to the country's banking activity.

The dyer's initial loan arrangement was a simple yet effective solution to a common problem, and it paved the way for the development of formal banking systems in China.

The People's Bank of China introduced the Renminbi in December 1948. This marked a significant shift in China's monetary system.

The Renminbi was initially only issued as bank notes, which began to circulate in areas controlled by the Communist Party. This was a crucial step in establishing a stable currency.

The new government aimed to end the hyper-inflation that had plagued China during the final years of the Republic of China. This goal was a major challenge that required a comprehensive solution.

In 1955, the yuan was revalued, with 1 new yuan being equal to 10,000 old yuan. This change had a significant impact on the economy.

The current series of Chinese banknotes, introduced from 1999, features denominations of 100, 50, 20, 10, 5, and 1 yuan notes. Chairman Mao is featured on all modern yuan notes.

Each note has the words 'People's Bank of China' written in Mandarin on one side, as well as in the Uyghur, Tibetan, Mongolian, and Zhuang languages on the reverse. This adds an interesting cultural touch to the banknotes.

Banknotes in denominations of one, five, 10, 20, 50, and 100 yuan are in circulation.

The current series of Chinese banknotes is the fifth series of the renminbi, introduced progressively from 1999.

It's divided into 100, 50, 20, 10, 5, and 1 yuan notes, with smaller note denominations of 5 and 1 jiao also commonly circulated.

Chairman Mao is featured on all the modern yuan notes, replacing the various leaders that featured earlier.

Each note has the words 'People's Bank of China' written in Mandarin on one side, and in the Uyghur, Tibetan, Mongolian, and Zhuang languages on the other.

Banknotes in denominations of one, five, 10, 20, 50, and 100 yuan are currently in circulation.

One yuan coins are also widely used in China.

Due to inflation, banknotes or coins with a value of less than one yuan, including one jiao and five jiao, are rarely used.

If someone insists on you paying the small change, you can just give them one yuan and tell them to keep the change instead.

The 2 yuan note is now very rarely seen, and older releases of Chinese currency included this denomination.

The basic unit of Chinese currency is the yuan, with 10 jiao to the yuan, known colloquially as mao.

Paper notes come in 1 and 5 jiao, 1, 2, 5, 10, 20, 50, and 100 yuan denominations, although the 2 Yuan Note is rarely seen these days.

There are also 1 jiao, 5 jiao, and 1 yuan coins in circulation.

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The Chinese currency features a range of images on its coins, each with its own unique significance.

The 1 Yuan coin has a reverse image of a Chrysanthemum, which is a symbol of longevity and honor in Chinese culture.

You can spot the Chrysanthemum design on the back of the 1 Yuan coin, a distinctive feature that sets it apart from other denominations.

The 5 Jiao coin, on the other hand, boasts a beautiful Lotus design on its reverse side, a representation of growth and renewal.

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Old Bank Notes can be quite rare and valuable, especially if they're from the fourth series.

The 2 yuan and 1 Yuan Notes from this series are more commonly seen in circulation, but other notes like the 100 Yuan and 50 Yuan are less frequently encountered.

These older bank notes often have unique designs and historical significance, making them interesting to collect and study.

The 100 Yuan and 50 Yuan notes are particularly seldom seen in circulation, which is why they're so valuable to collectors.

Chinese currency, also known as Renminbi (RMB), is not freely convertible, which means the exchange rate can be affected by the government.

The official exchange rate of RMB can be difficult to predict due to government intervention to avoid big fluctuations.

You can find the real-time official exchange rate of RMB online, which will be used when exchanging RMB while traveling in China.

Traveling to China? Booking a tour in advance with a reputable agency like The China Guide can help minimize exchange loss.

If you think your home currency will be stronger against RMB in the future, you can pay as little as 10% of the tour price at the time of booking to lock the price.

On the other hand, if you think your currency will be weaker against RMB in the future, you can pay up to 100% of the tour price in advance to lock the exchange rate.

If you're unsure about the exchange rate trend, paying 50% of the tour price at the time of booking will allow you to pay at the average exchange rate when your tour gets closer.

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In China, cryptocurrency is a rapidly growing market with a large user base.

The Chinese government has taken a cautious approach to regulating cryptocurrency, banning initial coin offerings (ICOs) in 2017.

Bitcoin is the most popular cryptocurrency in China, with many users investing in it through online exchanges.

In 2019, the Chinese government launched a cryptocurrency exchange, Huobi, to help regulate the market.

However, the Chinese government has also imposed strict capital controls on cryptocurrency transactions, requiring users to report any large transactions.

Bitcoin is widely accepted in China, with many merchants and online retailers accepting it as payment.

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