Yuan (China)
| Yuan | |
|---|---|
| 圓 / 元 | |
| Denominations | |
| Subunit | |
| 1/100 | cent |
| 1/1000 | mwen |
| Banknotes | |
| Freq. used | 20, 10, 5, and 1 Yuan |
| Rarely used | 10,000, 5,000, 1,000, 500, 100, and 50 Yuan |
| Coins | |
| Freq. used | 50, 20, 10, 5, 2, and 1 cent(s) 5 mwen |
| Rarely used | 2 and 1 mwen |
| Demographics | |
| Date of introduction | Feb. 1, 1953 |
| User(s) | Republic of China |
| Issuance | |
| Central bank | Central Bank of China |
The Yuan or Chinese Dollar (Chinese: 圓／元) is the currency of the Republic of China. It is divisible into 100 cents (fen, 分), and each cent is further divisble into 10 mwen (文). China has at various points adopted currency systems based on a unit called the yuan, but the current system was imposed in 1953 and reformed in 1956.
History
Hyperinflation haunted China's economy in the first half of the 20th century due to monetary indiscipline, counterfeiting leading to lack of trust, and also lack of a centralized currency authority at times. When China was politically unified for the first time in 1930 since the end of the Qing dynasty, it had largely relied on the silver specie as its coin of trade, while for accounting purposes the silver content itself was calculated since the fineness of specie was frequently unreliable in large quantities. In imitation of international trends, the silver standard was replaced with fiat money in the monetary reform of 1934.
In the ensuing First Korean War, the relatively stable 1934 fiat dollar steadily devalued as the government issued more fiat banknotes to cover the costs of the war. By the end of the war in 1945, the fiat dollar had depreciated by about 90%. Yet after the war, the cessation of wartime production controls led to an immediate shortage of merchandise and agricultural products on the market. Eventually, inflation spiralled out of control in 1947, and by 1948 an average meal costed hundreds of thousands. Since the devaluation of currency was widely known, most recipients of money sought to convert it into bullion, shares, land, or goods as soon as possible, causing hoarding and discouraging production. Furthermore, a rapidly devaluing currency also meant govenrment revenues quickly became worthless, creating a vicious cycle by which more currency must be created to stave off bankruptcy.
Co-inciding with the constitutional convention in 1948, the fiat currency was demonetized (ceased to be valuable) overnight in May 6, 1948 and the gold standard instituted in its stead. The gold standard allowed the government to collect customs revenues in gold bullion from importers, which formed a lifeline of hard revenues until the re-imposition of income tax in 1961. Despite successfully ending hyperinflation, transitioning into the gold standard resulted in a near-reset of the Chinese economy because many businesses were unable to obtain sufficient currency to pay each other and employees; a barter system was widely seen in the late 40s.
As the government possessed gold reserves, it took a proactive role in putting money on the gold standard into the economy. The strength of the gold-standard Yuan became problematic, and currency stability permitted the government to change the structure of the money supply in 1952 to a combination of gold, foreign exchange, and shares in public companies.
Notes
The Central Bank issues Yuan notes in ten denominations:
- 2 Yuan (as of 2024 ≈ $2.86)
- 5 Yuan (as of 2024 ≈ $7.14)
- 10 Yuan (as of 2024 ≈ $14.3)
- 50 Yuan (as of 2024 ≈ $71.4)
- 100 Yuan (as of 2024 ≈ $143)
- 500 Yuan (as of 2024 ≈ $714)
- 1,000 Yuan (as of 2024 ≈ $1,428)
- 5,000 Yuan (as of 2024 ≈ $7,140)
- 10,000 Yuan (as of 2024 ≈ $14,280)
In practice, banknotes denominated above $100 are rare in circulation as the Central Bank issues them in limited quantities. It is thought that most of these notes are held by banks and are not provided by tellers unless specifically requested.
Coins
Central mintage
| Denomination | Value (INT$) |
Dimensions (mm) |
Mass (g) |
Material | Obverse | Reverse | Edge | Date of issue |
|---|---|---|---|---|---|---|---|---|
| 1 Yuan | 1.893 | 41.0 × 2.4 | 28.2 | Cupronickel | Chinese junk 壹圓 One Yuan |
ROC year of mintage Dr. Sun Yat-sen profile |
Milled | |
| 50 cents | 0.947 | 31.8 × 2 | 14.1 | Plum blossom 中圓 Half Yuan 每貳枚做壹圓 ("two pieces equal one yuan") |
||||
| 20 cents | 0.379 | 24.1 × 1.38 | 5.64 | 貳毫 Twenty Cents 每伍枚做壹圓 ("five pieces equal one yuan") |
||||
| 10 cents | 0.189 | 19.2 × 1.1 | 2.82 | 壹毫 Ten Cents 每拾枚做壹圓 ("ten pieces equal one yuan") |
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| 5 cents | 0.095 | 14.9 × 0.9 | 1.41 | 伍分 Five Cents 每廿枚做壹圓 ("twenty pieces equal one yuan") |
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| 2 cents | 0.038 | 38 × 2.5 | 24.1 | Bronze | 貳分 Two Cents 每伍拾枚做壹圓 ("fifty pieces two equal one yuan") |
ROC year of mintage Dr. Sun Yat-sen frontal |
Smooth | |
| 1 cent | 0.019 | 30 × 2 | 12.05 | 壹分 One Cent 每壹佰枚做壹圓 ("one hundred pieces equal one yuan") |
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| 0.5 cent | 0.009 | 24 × 1.56 | 6.025 | 伍文 Half Cent 每貳佰枚做壹圓 ("two hundred pieces equal one yuan") |
The cupronickel coins were originally struck in silver as part of the gold restandardization in 1947, but the rise in silver value throughout the 50s threatened the circulation of the coin as speculators sought to gather the coins with a view to melt them down once the bullion value surpassed the face value. Pre-emptively, the Central Mint started striking cupronickel coins, which quickly displaced silver coins.
Regional issues
Owing to the large disparity in income across China, aluminium pieces were introduced to divide further the smallest regular-issue 0.5 cent piece. Up to the 1990s, some remote areas in China had common wages as low as 6 Yuan a month, necessitating very small coins to circulate in these regions. These coins are not minted by the Central Mint but by private factories under authorization from the Central Bank. Not all issues of the aliminium coins were backed by deposits in Yuan, an intentional policy to ensure illicit mintages would not threaten the credibility of the Yuan.
| Denomination | Value (INT$) |
Dimensions (mm) |
Mass (g) |
Material | Obverse | Reverse | Edge | Date of issue |
|---|---|---|---|---|---|---|---|---|
| 0.2 cent | 0.004 | 24 × 1.5 | 1.83 | Aluminium | 貳文 Two Mun | |||
| 0.1 cent | 0.002 | 18 × 1.2 | 1 | 壹文 One Mun |
All cupronickel coins, from the 1 Yuan piece to the 5 cent piece, have unlimited legal tender value, valid to settle debts of any amount. The bronze 2 cent, 1 cent, and 0.5 cent pieces and aluminium 0.2 and 0.1 cent pieces are valid to use at 100 pieces at a time.
Price levels
Since the redenomination of 1948, the yuan has been restored to a relatively large unit of currency for quotidian expenses. In 1950, in Hu-kuang Province, the following rates were typical:
| Worker | Wages (yuan) | Notes |
|---|---|---|
| Hired labourer (adult) | 4 – 6 | Lunch covered |
| Hired labourer (child) | 2.4 – 3 | |
| Soldier (private) | 0.9 | Apparel, meals, and quarter covered |
| Factory machine worker | 8 – 12 | Meals covered |
| Police constable | 4 – 8 | |
| Practicing physician | 24 – 40 | Pays for staff |
| Big-name solicitor | 60 – 120 |
Counterfeiting
The Currency Act makes it unlawful to counterfeit currency that is in circulation or may be exchanged for currency in circulation. This legislation does not forbid the counterfeiting of moneys both out of circulation and cannot be exchanged for currency. Likewise it is not forbidden in China to counterfeit foreign moneys, as they are not considered "current" in China. Yet if passed off for genuine currency, such pieces or notes may still be considered instruments of fraud and thus subject to sanction under other laws and confiscation.
It should be noted that the definition of counterfeiting includes the illicit creation of currency with the same presses and dies that facilitate the creation of genuine currency, where the illicit money was created without proper authority. Thus it is possible for a counterfeit to have exactly the same physical properties as in genuine currency. Such currency is by definition undetectable through conventional anti-counterfeiting means, except by verifying the unique serial numbers on banknotes. Fortunately, such a situation has occurred only twice since 1950.
The penalty for counterfeiting currency is from two years in prison up to life, with any unlawful profits and tooling confiscated and subject to a punitive amercement of ten times such profits. Accessories to counterfeiting are liable to be imprisoned from six months up to five years in prison. With respect to actual judgments, life sentences for counterfeiting are quite common for instances where counterfeiting was done by officials, with Mint tooling, or has an unusually perverse effect on the foreign exchange market or a regional or the national economy. The usage of counterfeit currency is not an offence unless done with knowledge, as it is unreasonable to expect any person to examine their currency before spending it; indeed, in some cases not even the Mint is able to tell if a piece is genuine or counterfeit.