Yuan (English. yuan) is the official monetary unit of the People's Republic of China in the Renminbi (RMB) system. Literally, the yuan translates as a precious shell and renminbi as people's money. One yuan is divided into 10 zao, or 100 feng. That is, 4.25 yuan can be divided into 4 yuan, 2 ziao and 5 feng. In the international system ISO currency is designated as CNY. The symbol of the yuan is "?" is very similar to the Japanese yen sign "? In everyday life and colloquial speech, it is not uncommon to find the simplified pronunciation of yuan as "kuai" and tzao as "mao.
China's monetary unit got its main name because of its circular shape. This is how the coins of the Qing Dynasty were minted. Note that and Japanese yen was named for the same reason, so it is not surprising that historically the names of Japan's and Korea's currencies are derived from the yuan (won).
History of the formation of the Chinese yuan
Before the advent of the yuan, that is, until the early 20th century, the basic unit of currency in China was silver lan or tael, it was also split into 10 mao and 100 fynes (as you can see, the names were virtually unchanged). There were also silver bullion yambas (yuanbao), which substituted for 50 liang. In addition, there were ancient copper coins qianyi or keshi, which were mostly used in the countryside. And, of course, there were various coins of foreign countries, the exchange rate of which was practically not regulated in any way.
Nevertheless, most of the coins were minted in silver, so it is clear that in China it was the silver standardThe government was not allowed to change the rules, which determined the rate of the national currency in relation to world prices for the metal in question. On October 15, 1934, however, a duty was imposed on all silver exported from China, which immediately forced the government to depart from the existing rules.
As a result, in 1935 the monetary reform in China was carried out, during which it was decided to abandon the silver standard in favor of the generally accepted gold standardbut without its fixed content in a unit of currency. As a result, all the silver yuan was withdrawn from circulation and replaced by paper ones, called "Fabi. Such a decision led to the strongest Inflationwhich resulted in a 100-fold increase in the dollar-yuan exchange rate over nine years.
Renminbi - people's money
Naturally, the uncontrolled devaluation of the national currency could not pass without trace, as a result, in 1948 it was established gold content of one yuanwhich was 0.22217 grams of pure gold. It was also necessary to denominate the available fabi, so paper "gold yuan" were printed and exchanged at the rate of 3,000,000:1. This was also where the pegging the yuan to the dollar at the rate of 4 gold yuan per U.S. dollar. However, almost immediately it was devalued to the rate of 20:1.
The process of forming the People's Republic of China, which included the reunification of areas liberated by the Communist People's Liberation Army of China, led to the replacement of almost all "local" currencies by the official yuan, the issue of which was entrusted to the People's Bank of China, established on December 1, 1948. The monetary system formed under these conditions was called Renminbi or "People's Money". Only by 1959 was the process largely completed.
The official exchange rate of the yuan and its role in the global economy
For a long time, until 1972, the exchange rate of the yuan was determined mainly by the pound sterling and the Hong Kong dollar. It was only in August 1974 that the daily exchange rate of the yuan to the US dollar and other currencies on the basis of a currency basket. The Chinese authorities preferred to have a clear, fixed exchange rate of the national currency, so in 1994 they set it at 8.27 yuan per dollar. But in this form it caused serious disputes between China and other countries for many years. The fact is that the low fixed exchange rate gives China a significant advantage in exporting its goods. The lower the price, the cheaper the output. As a result, the competitiveness of Chinese goods increases and often at the expense of quality.
It was only in 2005 that the Bank of China abandoned the pegging of the yuan to the U.S. dollar, deciding to focus on currency basket. As a result, the exchange rate rose by only 2%. During the crisis such a peg could have cost the PRC stability, but it did not happen: the yuan exchange rate is approximately at 6.8-6.9 units per dollar.
The yuan is now increasingly taking the lead on the global stage. Many countries are looking at it as a reserve currency and of course everyone is watching the economy of China, the world's main producer. There is a lot of investment in China, given that it has the lion's share of global production, so the yuan will be looked at for a long time to come, and it will be looked at with respect.