The exchange of currency is the central business method of any economy in the world. Whether the transactions take place online or offline, the value of the currency plays a crucial role in determining the particular country’s placement among the major global economies.
Yuan Currency vs Renminbi Currency
The main difference between Yuan and Renminbi Currencies is that the former is the countrywide monetary system of China while the latter is a bigger unit of Yuan (the base). The denominations are categorized based on these two factors and there is no set rule regarding the change.
Yuan Currency has been derived from the Chinese equivalent of peace. It is henceforth pronounced as “kuài”. The reason behind such a name is the inherent properties of the material used for the formulation of the old token currency. Since they were earlier made of silver, they symbolize peace since it is peaceful metal.
Renminbi Currency was first produced by The China Banknote Printing and Minting, which is considered to be the topmost financial branch of the government. This currency comes in a total of five series. With each subsequent series, the penultimate one became outdated. Renminbi also replaced Yuan-named currency.
Comparison Table Between Yuan And Renminbi Currencies
| Parameters of Comparison | Yuan Currency | Renminbi Currency |
| Definition | It is the interchangeable term for the value of the official currency, that is, Renminbi. | It is considered to be China’s official currency. |
| Symbolism in China | Yuan is denoted as a bigger version of jiao. | Renminbi is most commonly denoted as the “people’s money”. |
| Units Ascribed in Economy | Yuan currency is only considered as the unit of account. | Renminbi is synonymous with the actual unit of the Chinese currency, of different denominations (both big and small). |
| Probable Year of Introduction | Yuan has been around since 1889. | Renminbi came into existence much later, after the year 1949. |
| Territorial Interpretations | In China, the yuan is interpreted as CNY, while it becomes CNH in the context of Hong Kong. | The Renminbi currency has a universally accepted interpretation, that is, RMB. |
What is Yuan Currency?
Yuan Currency is held in high spirits by the People’s Bank of China. It is akin to a country’s unofficial currency. Foreign investments are widely attributed to the units of Yuan. They can also be submitted interchangeably. As the Indian denominations are divided into rupees and paise, the Chinese system includes Yuan and jiaos. They might have been outdated due to the introduction of the Renminbi but the values are still intact.
Yuan Currency was earlier circulated widely in the form of silver coins. Some historical pieces of evidence also suggest the prevalence of copper coins but they were not necessarily Yuan. Jiaos might be comparable to the copper coins of those times. It can be considered that both these units have always coexisted for aiding the common people in the economic transactions of daily life.
Yuan Currency is a bigger version as it incorporates ten jiaos. There is another categorization known as a fen. For further analysis, a jiao can be considered as a combination of ten fens. Therefore, one Yuan is akin to a hundred fen. The smaller currencies are still circulated but the value has depreciated due to the sudden inflow of the Renminbi. Both have similar denominations.
What is Renminbi Currency?
Renminbi currency is linked to the shooting up of the Chinese market. In the global arena, China has a strong economic hold owing to the constant value of the Renminbi only. Though it was introduced as a completely new denomination in the year 1949, the habitual use of the Yuan did not fade today. Thus, both currencies have been incorporated in the fiscal policy in the present times too. This facilitates optimum use of small denominations along with the big ones.
Once a currency is chosen, it becomes unanimously applicable throughout the country or territory. The same is the case with Renminbi. When asked about the official currency, every Chinese citizen will present Renminbi only. Since the market’s condition is determined by the balancing of imports and exports, the residents do not focus much on this one.
Renminbi currency, in other words, is the umbrella term that includes Yuan, jiao, as well as fen. It is like the analogous existence of a dollar and a US dollar. Though values keep on changing, the high significance of investing in the Chinese market has been maintained ever since, thanks to the introduction of this new currency.
For instance, if a commodity costs 100, it would cost 100 Yuan in China and the payment of 100 Yuan would be made using denominations that belong to the Renminbi.
Main Differences Between Yuan And Renminbi Currencies
- Yuan Currency can be defined as the place value of Chinese monetary transactions while Renminbi is the popular face value.
- The Chinese symbolism of Yuan is limited to the senior option for jiao whle Renminbi is just the “people’s money” (official).
- As far as the economic units are concerned, Yuan is compared with accounting units, whereas Renminbi is comparable to further denominations.
- The existence of Yuan dates back to 1889 while Renminbi came in 1949, as a successor. Though they coexist, the values are not the same.
- The interpretative variations of Yuan are CNY and CNH (for territorial transactions of China and Hong Kong respectively). On the other hand, Renminbi is universally attributed to the abbreviation RMB.
Conclusion
Ever since the decline of the barter system (the system of exchanging goods for goods), there has been a lot of hue and cry regarding the standardization of token currency.
Though the parameters were not much sorted in the former, the chances of counterfeit were negligible. These days, even digital currency is being misappropriated owing to less secure passwords and other careless activities of the uneducated folk.
In most cases, the denominations are decided by the central bank and government of the respective nation. Based on the fluctuations in the market, the value either depreciates or there is an overall profit.
References
- https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1749-124X.2012.01302.x
- https://www.tandfonline.com/doi/full/10.1080/13563467.2011.615915