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China’s currency is the renminbi or yuan. Currency should not be a topic that gets businesses scratching their heads. Yuan vs Renminbi: An Overview breaks down the currency into three parts and explains how each part works—the five RMB notes and five RMB coins, how the renminbi is pegged to the U.S. dollar about a basket of currencies such as the euro, Japanese yen, and British pound, as well as how Chinese firms are allowed to invest abroad with renminbi and Chinese banks can invest in foreign countries without incurring losses that could impact the value of their investment.
China’s Currency
China’s currency is the renminbi or yuan. China is the world’s second-largest economy and its largest exporter. It’s also a leading market for American products. In recent years, critics have accused China of deliberately keeping its currency value low to encourage Americans to buy Chinese goods. China has denied using currency manipulation to drive down prices and boost exports.
China’s exchange rate policy
China’s exchange rate policy, specifically the value of its currency, the yuan, has found itself at the centre of international controversy. With rising labour costs and increasing competition amongst low-cost producers in Southern America and elsewhere, China’s previously relentless growth has slowed somewhat. The slowing (and perhaps bottom-of-market) conditions have led to concerns that Beijing will resort to subtle protectionism to revive growth. This article focuses on what “protectionism” means and, more importantly, why it is a bad idea for China.
The yuan is a foreign exchange currency, or FX (or ‘forex’) traded on the foreign exchange market. It is the national currency of China (the Renminbi – or “people’s money”), and the basic unit of the Yuan is equal to 10 jiao. The renminbi can be subdivided into 10 fens or 100 sen. Yuan is also spelt as Yen when it represents the Japanese currency.
Renminbi Internationalisation
Become familiar with the issues that shape monetary and financial policies in the emerging markets before they become big news. In “Renminbi Internationalisation: Issues, Progress, and Implications,” Michael Pettis and Lixin Colin Xu present many of these issues in terms of fundamental theory. They discuss the internationalisation of the Chinese yuan (renminbi) in terms of both theory of optimal currency areas and international finance. They explore the implications for the United States and other major economies as China moves toward currency internationalisation, also addressing questions such as why China might choose to do so at a particular moment, how it would manage to do so, whether and how it would work for the rest of the world, and finally whether currency internationalisation could be affected by capital-market developments in China itself.
Difference between the renminbi and the yuan
One of the most frequently asked questions by tourists and foreign nationals alike is the difference between the RMB and the Yuan. The question is somewhat misleading as there is no difference in their meaning. “RMB” stands for Renminbi, also called “People’s money”. RMB is a name for China currency or unit of Chinese currency that is also abbreviated as CNY or CNH, not to be confused with the person name of Yuan.
The Chinese currency system is different from the whole system, where prices are read in dollars. It is always better to find out how much a product costs. Other than RMB, there is also another unit used in China. It is called yuan and is abbreviated with “CNY”. This denomination is used for price labelling in China and many other countries. China has denied using currency manipulation to drive down prices and boost exports.
RMB is the currency used in China. It is referred to as Renminbi or Yuan, so RMB 100 and ¥100 are the same things in China. You can only exchange foreign currency for RMB at a bank or a foreign exchange counter. Alternatively, you will be charged a fee as ‘bank service’.
Conclusion
The Chinese economy is still growing steadily, and the international community notes. The Chinese currency has also opened up to other countries and is even more easily accessible now; However, it may be difficult for individuals to get their hands on many renminbi. Some will be able to invest in this growing currency for the long term. China might not be the first-option country for foreign trade, but its impact cannot be ignored. China’s currency will continue to impact our personal lives as well. With rising labour costs and increasing competition amongst low-cost producers in Southern America and elsewhere, China’s previously relentless growth has slowed somewhat.
