Chinese
money is called Renminbi (RMB) -- "The People's Currency". The
popular unit of RMB is yuan (CNY).
The official exchange rate between U.S. dollar and Renminbi yuan is about
1:8.3 --1 dollar = 8.3 yuan.
1 yuan equals 10 jiao, 1 jiao equals 10 fen. There are parts of China where
the yuan is also known as Kuai and Jiao is known as mao.
Chinese currency is issued in the following denominations: one, two, five,
ten, twenty, fifty and one hundred yuan; one, two and five jiao; and one,
two and five fen.
With the increasing amount of investment taking place in the country and
also a massive increase in export growth, it created a strong demand for
China's currency, the yuan. Such demand pressures will cause the yuan to
appreciate in its value comparing to the U.S. dollar up lifting China's
economic structure.
In order to maintain the yuan's fixed value, China must create a residual
supply of yuan to counter growing demand for its currency; China achieves
this by buying dollars in foreign exchange markets. During the year 2000 to
2003, China doubled its foreign reserve holdings, from16% of its GDP to 31%
of its GDP.
