If you’ve ever stared at a currency exchange board or tried to pay for a dumpling in Shanghai, you've probably felt that split-second of hesitation. Is it the Yuan? Is it the Renminbi? Are they the same thing or is one a secret nickname? Honestly, it's one of the most common points of confusion for travelers and investors alike.
China’s money situation is unique. Most countries have one name for their money. We have the US Dollar. The UK has the Pound. Japan has the Yen. But China? China essentially has two names for the same stack of bills.
It’s confusing.
Defining the Terms: Renminbi vs. Yuan
Let's get the big answer out of the way immediately. What is the Chinese currency called? Officially, it is the Renminbi. If you are looking at official bank documents, international trade agreements, or news from the People’s Bank of China (PBOC), you will see it referred to as the Renminbi, often abbreviated as RMB.
However, the unit of account—the thing you actually count—is the Yuan.
Think of it like the British system. The currency is "Sterling," but the unit is the "Pound." You wouldn't walk into a shop in London and say something costs five Sterling; you'd say it costs five pounds. China works the exact same way. The "Renminbi" is the medium of exchange, the name of the system itself. The "Yuan" is the number on the price tag.
The Literal Meaning
Renminbi (人民币) translates literally to "People’s Currency." It was introduced by the Communist Party’s People’s Bank of China in 1948, just before the founding of the People’s Republic. The goal was to unify a country that had been fractured by different regional currencies and hyperinflation.
The word "Yuan" (元), on the other hand, just means "round object" or "circle." Historically, this referred to the silver coins used during the Qing Dynasty. Today, it’s just the word for a single unit of money.
In casual conversation in China, you might not even hear the word Yuan. People often say "kuai" (块), which literally means "piece." It’s the equivalent of saying "bucks" in the United States. If a street food vendor tells you your noodles are "shi kuai," they mean ten yuan.
Why the World Uses Two Symbols
If you are trading stocks or looking at a currency converter, you’ll notice two different ISO codes: CNY and CNH. This is where things get slightly technical, but it’s crucial if you’re doing business.
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Basically, China keeps a tight grip on its money.
CNY refers to the Renminbi traded within mainland China (onshore). The Chinese government controls the exchange rate of CNY, allowing it to fluctuate only within a narrow band against the US dollar.
CNH is the Renminbi traded outside of mainland China (offshore), primarily in Hong Kong, Singapore, and London. The value of CNH is more heavily influenced by the free market. While they are technically the same currency—the Renminbi—they can sometimes have slightly different exchange rates because of these capital controls.
It’s a dual-track system. It allows China to participate in global trade while still maintaining a "firewall" around its domestic economy.
The Physical Bills: Mao and Mountains
If you hold a Renminbi note in your hand, you’ll notice a few things immediately. Every single denomination currently in circulation features the face of Mao Zedong on the front.
But the back of the bills? That's where it gets interesting.
The 100-yuan note is red—lucky in Chinese culture—and shows the Great Hall of the People in Beijing. The 50 is green and features the Potala Palace in Tibet. The 20 shows the breathtaking karst mountains of Guilin, a place so beautiful it looks fake until you see it in person.
The denominations are:
- 1 Yuan (coins or paper)
- 5 Yuan
- 10 Yuan
- 20 Yuan
- 50 Yuan
- 100 Yuan
There are also smaller units called jiao and fen. Ten jiao make one Yuan. Ten fen make one jiao. In modern Chinese cities like Beijing or Shenzhen, fen have almost entirely disappeared because they are worth so little. You might still see jiao coins, but even those are becoming rare.
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The Death of Cash in China
Here is something that shocks most first-time visitors: nobody uses the physical currency anymore.
You could spend a month in Shanghai without ever touching a paper Yuan. China has effectively leapfrogged credit cards and gone straight to mobile payments. Everything—literally everything—is done through WeChat Pay or Alipay.
You’ll see a 90-year-old grandmother buying kale at a wet market by scanning a QR code with a cracked smartphone. You’ll see a street performer with a printed QR code on their guitar case.
For a long time, this was a massive headache for foreigners because these apps required a local Chinese bank account. Thankfully, as of 2024 and 2025, Alipay and WeChat have made it much easier for international travelers to link their Visa or Mastercard.
If you're going to China, don't rely on the "People's Currency" in its physical form. Download the apps.
The Rise of the Digital Yuan (e-CNY)
While we are talking about the future, we have to mention the e-CNY. This is not Bitcoin. It is not a volatile cryptocurrency. It is a Central Bank Digital Currency (CBDC).
The Chinese government is currently rolling out a digital version of the Renminbi. It’s a legal tender, issued by the central bank, meant to replace some of the cash in circulation. Why? It gives the government more visibility into how money moves, and it makes transactions even faster and more secure.
It’s already being used in pilot programs across dozens of cities. During the Beijing Winter Olympics, it was one of the primary ways athletes could pay for things. While it hasn't completely replaced the "old" Renminbi yet, it's a signal of where the global economy is headed.
Common Misconceptions About the Chinese Currency
One big mistake people make is thinking the Yuan is "pegged" to the dollar at a fixed rate forever. It used to be, but that changed in 2005. Now, it follows a "managed float." The PBOC looks at a basket of currencies and decides where the Yuan should be.
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Another misconception? That the Yuan will replace the US Dollar as the world's reserve currency tomorrow.
While the use of Renminbi in international trade is growing—especially in deals with Russia, Brazil, and parts of the Middle East—it still accounts for a relatively small percentage of global foreign exchange reserves. The Dollar is still king, mostly because the Renminbi isn't fully "convertible." You can't just move massive amounts of money out of China without government approval.
Until China opens up its capital accounts, the Renminbi will likely remain a powerful regional currency rather than a global hegemon.
Essential Tips for Handling Chinese Money
If you're planning a trip or starting a business venture involving China, keep these practical points in mind.
First, check your bills. Counterfeiting used to be a major problem in China, particularly with 100-yuan notes. While mobile payments have made this less of an issue, if you do use cash, feel the hair on Mao's head. It should be textured and slightly rough to the touch. If it's smooth, it's likely a fake.
Second, don't expect to tip. Tipping is not a part of Chinese culture. In fact, in some places, it might even be seen as slightly confusing or even offensive, as if you’re suggesting the staff isn't paid enough. The price you see is the price you pay.
Third, exchange some money before you leave the airport. Even though mobile apps are dominant, you’ll want a few hundred Yuan in cash for emergencies or for those rare moments when a foreign card doesn't play nice with a local machine.
Actionable Next Steps
To get comfortable with the Chinese currency, start by checking the current exchange rate on a reliable site like XE.com or OANDA. It fluctuates daily, so get a "feel" for the numbers.
If you are a business owner looking to source products from China, ask your suppliers if they prefer payment in CNY or USD. Sometimes, paying in the local currency can give you more leverage in price negotiations.
Finally, if you are traveling, download the Alipay app at least a week before your trip. Set up your "TourPass" or link your international card and do a small verification. It beats carrying a thick wallet of paper Yuan any day of the week.
Understanding the Renminbi isn't just about knowing what the money is called; it's about understanding how the second-largest economy in the world functions on a day-to-day basis. Whether you call it the Yuan, the RMB, or just "kuai," it’s the engine behind China's massive growth.