China is a global business hub with world-famous tourist attractions like the Great Wall and Terracotta Army.
Whether you’re there to explore this Asian country’s ancient sites or passing through for business, you’ll need to know a bit about China’s currency, the yuan. Or you may want the scoop on the currency if you’re sending money to family or friends in China.
In this guide, we’ll explore the rich history of Chinese currency, how you can exchange dollars for yuan, and what to watch out for along the way.
What is the currency in China?
The name for Chinese currency, renminbi, translates to “the people’s currency.” The People’s Bank of China manages the renminbi, which is abbreviated as RMB.
So, what’s the difference between the renminbi and the yuan? Well, the yuan (CNY) is simply the basic unit of the renminbi currency. The symbol for yuan is ¥.
People tend to use the terms interchangeably despite that nuance. In everyday use, especially outside China, you’re more likely to hear people refer to Chinese currency as yuan.
Yuan break down into jiao and fen. Here’s a look at the numbers behind these units of renminbi and how they all relate:
- Chinese banknotes come in denominations of ¥1, ¥2, ¥5, ¥10, ¥20, ¥50, and ¥100. They also come in 1, 2, and 5 jiao denominations.
- ¥1 can be broken down into 10 jiao.
- 1 jiao is divided into 10 fen.
- Coins are issued in denominations of ¥0.1 (1 jiao), ¥0.5 (5 jiao), and ¥1.
Tip: When paying with banknotes, merchants may inspect them closely to ensure their authenticity.
It’s important to note that Hong Kong, a special administrative region (SAR) of China, has its own currency. The currency of Hong Kong is the Hong Kong dollar (HKD). However, the renminbi is sometimes accepted as a valid form of payment in Hong Kong.
History of the Chinese yuan
The history of Chinese money goes back centuries, with China pioneering some of money’s earliest forms. Around 1100 BCE, the Zhou Dynasty likely invented the world’s first metal coins made from bronze.
For the centuries that followed, China was a nation of warring states, and many different currencies were used as a result. In the 13th century, the Yuan dynasty unified the country and its economy with one paper currency, the Jiaochao. It’s considered the world’s first government-issued fiat currency.
The yuan currency’s roots trace back to the Spanish or Mexican dollar, which China imported from Spanish America from the 16th through 20th centuries. Considered the world’s first international currency, it circulated in East and Southeast Asia.
The People’s Bank of China introduced the yuan in its current form in 1948, roughly a year before the People’s Republic of China formed. It introduced the yuan as a series of banknotes and rebranded it as the renminbi.
In today’s global economy, the yuan is one of the most used currencies for settling international payments. The currency’s exchange rate fluctuates, but some economists suggest that the Chinese government keeps its currency price artificially low to make exports more competitive in the international market.
7 tips for exchanging US dollars for Chinese yuan
Exchanging US dollars (USD) for Chinese currency might seem intimidating, but we’re here to help. These tips for converting USD to CNY will help you find the most favorable exchange rates, know what to expect when it comes to exchange fees, and avoid tourist traps.
1. Research and compare exchange rates
Chinese money exchange rates differ depending on where you make your exchange. Research rates from multiple sources, including banks, exchange kiosks, and online platforms, to make sure you get a good rate. You can track live exchange rates on the Western Union® app or website for the most up-to-date information.
2. Notify your bank ahead of traveling
Whether you have just a short layover in China or are planning an extended trip, it’s best to let your bank and credit card companies know about your travels ahead of time. That’s because banks sometimes flag international transactions.
If your bank is unaware that you’re traveling, it might consider your transactions suspicious. This could lead to the freezing of your bank account or credit cards, which is a major hassle.
3. Avoid exchanging money at airports, hotels, and tourist areas
Learning where to exchange foreign currency in China starts with knowing where not to exchange money. It’s wise to avoid airports, hotels, and tourist areas, where you’re more likely to encounter excessive fees and poor exchange rates for your dollars.
4. Consider commissions and fees
Chinese currency exchanges have been known to hit foreigners with hidden fees and bloated commissions. So stay vigilant.
When choosing an exchange operator, make sure to review their fee structures so you fully grasp how much they’re charging you. Look out for convenience fees, exchange operator fees, commissions, and other additional charges. This is good advice no matter where you’re traveling.
5. Opt to be charged in the Chinese currency when withdrawing money from ATMs
If you’re spending time in Beijing, Shanghai, or other major cities, you’ll find ATMs operated by the state-owned company UnionPay. Urban ATMs will often have directions in English and are fairly similar to ATMs in the US.
Before inserting your card into an ATM, first check that it accepts your credit card type (Visa, Mastercard, etc.). Remember to withdraw your money in the local Chinese currency to reduce your fees and get a better conversion rate.
ATMs aren’t readily available in rural areas of China. So, if you’re trekking to one of the country’s many rural regions, it’s a good idea to bring cash with you.
6. Exchange money in China instead of the US
If you want a better exchange rate, don’t exchange your dollars for yuan at home. Instead, wait until you arrive at your destination to use a money exchange. You’ll have a wider range of options, boosting the odds of landing a more favorable exchange rate.
Why? For starters, local exchange services are more likely to offer competitive rates, particularly in areas that draw a lot of tourists. Using local ATMs to withdraw local currencies also often means competitive exchange rates. Further, some currency exchange providers may offer lower prices or discounts when you pay them in the local currency.
7. Use reputable exchanges
Using a reputable exchange will ensure you receive authentic Chinese yuan banknotes and aren’t charged hidden, unnecessary fees or an excessive exchange rate markup. You can use a Chinese bank to exchange your dollars for China’s currency, but you may face a long wait time.
You can also exchange currency using money service providers like Western Union, which provides transfer tracking, encryption, and other enhanced features for a fast, secure exchange.
Using money in China
When transacting in China, it helps to know the country’s money standards and etiquette. For instance, can you use US dollars in China? And what are the norms for tipping? Let’s answer those questions and more.
Can you use US dollars in China?
If you’re paying for plane tickets and hotels ahead of time, you can use dollars for your travel preparations. Once you’re on Chinese soil, you’ll encounter some merchants that accept US dollars as payment, but it’s not common. Be sure to ask the merchant ahead of time whether it’s an option.
Making all your payments in yuan is your best bet. After all, it’s accepted everywhere, and you’ll also receive better value for your purchase.
If you want to send money to family or friends in China, you can quickly and easily convert your dollars to yuan online using Western Union. You can even send money to yourself for pickup at an agent location in China.
Tipping etiquette in China
Unlike the United States, tipping isn’t common in China. In many instances, tips may even be considered embarrassing and refused by service staff.
Yet, in recent decades, small tips for restaurant and hospitality workers have become more common, especially in more upscale establishments. If you receive great service, you can attempt to leave a small tip, but don’t be surprised if the recipient rejects it.
Where to get Chinese yuan near me?
If you’re in China and looking for a currency exchange near you, there are plenty of options to convert your USD to CNY. These include banks, airports, hotels, travel agencies, online currency exchange services, or one of the 100+ Western Union agents located throughout the country who can get you access to Chinese currency.
Or, you can convert USD digitally to Chinese currency using an online platform like Western Union and add CNY to your mobile wallet.
FAQs
Why does China have 2 currencies?
China has only one currency, but you’ll often hear people call it by two names: the renminbi and the yuan. While many use the terms interchangeably, the yuan is actually a unit of the renminbi currency. This can be confusing, but just remember that both terms refer to the same Chinese currency.
What is the difference between the renminbi and yuan?
The renminbi, which translates to “people’s currency” in Mandarin, is the high-level term for Chinese currency. The yuan is a unit of that currency, along with jiao (equal to one-tenth of a yuan) and fen (equal to one-tenth of a jiao).
Do China and Hong Kong use the same currency?
No. China uses the yuan, but Hong Kong has maintained its own currency—the Hong Kong dollar. You may be able to use yuan in Hong Kong at certain merchants, but it’s best to ask ahead of time to make sure it’s accepted.
Can I use my credit card in China?
You can use your credit card in most major Chinese cities, but it may be difficult to do so in rural areas where cash is more widely accepted.
Can I use my debit card in China?
Yes, you can use a debit card in China, but smaller shops or markets may not accept your card. Keep in mind that you’ll have to factor in transaction fees when using your debit card internationally or getting cash from a Chinese ATM.
How do I convert Chinese currency to US dollars?
You can easily convert USD to CNY by locating one of the 28,000 Western Union service providers in China. There, an agent can help you exchange your money with low fees at a favorable rate.
