Chinese Money

The history of Chinese money is another fascinating topic covering a period of over 3000 years. The present currency is known as the people’s currency namely the re(2)min(2)bi(4). It assumed that the name since 1949 and is the legal tender on the Chinese mainland but not in Hong Kong and Macau.The special administrative regions of Hong Kong and Macau use the Hong Kong dollar and the Macanese pataca, respectively.

The basic unit of the currency is the yuan(2)) which derives from yuan(2) which means round after the shape of the coins. One tenth of the yuan is often called a jiao(3) known colloquially as the mao(2). One hundredth of a yuan is called a fen(1) which is now very little used because of its low value. In spoken Chinese, a yuan is called a kuai(4) and a jiao(3) is called a mao(2). The yuan(2) which is a paper bill, comes in denominations of 1, 2, 5, 10, 20, 50 and 100 in ren(2)min(2)bi(4)

As mentioned above the history of Chinese currency spans more than 3000 years. Currency of some type has been used in China since the Neolithic age which can be traced back to between 3000 and 4500 years ago. Cowry shells are believed to have been the earliest form of currency used in Central China, and were used during the Neolithic period. Interestingly other countries used sea shells for their currency.

I will attempt to describe briefly the development of the Chinese currency over successive dynasties.

The first emperor of China Qin Shi Huang (260–210 BCE) abolished all other forms of local currency and introduced a uniform copper coin. Paper money was invented in China in the 9th CE, but the base unit of currency remained the copper coin. Copper coins were used as the chief denomination of currency in China until the introduction of the yuan.

The use of shell money is reflected in the Chinese writing system. The traditional characters for ‘goods’ (貨), ‘buy/sell’ (買/賣), and ‘monger’ (販), in addition to various other words relating to ‘exchange’, all contain the radical貝, which is the pictograph for shell (simplified in the People’s Republic to 贝). The extent of the circulation of shell money is unknown, and barter trade may have been common. However, copies of cowry shells made out of bone, wood, stone, lead and copper were also in circulation in trading activities. Figure below shows some shells used in money between the 16th and 8th BCE

It has been suggested that the Chinese may have invented the first metal coins for example metal coins have been found in Anyang and dated to around 900 BCE. At that time, the coin itself was a copy of more earlier used cowry shells, so it was called the Bronze shell.Bronzed shells were found in the ruins in the old capital of the Shang Dynasty (1500-1046 BCE) of Yin.The alloy bronze became the universal currency during the succeeding Zhou Dynasty. During the Warring States period, from the 5th century BC to 221 BC, Chinese money was in the form of bronze objects that were of three main types. The Zhou, the Wei (魏), the Han (汉) and the Qin (秦) all used coins shaped like a spade (bu). The Qi (齊) used money in the shape of a knife (dao). The Zhao (趙) and the Yan (燕) used knife money before switching over to spade money roughly halfway through the Warring States period. The Chu (楚) used money in the forms of “ant nose” coins (yibi).

As part of the Unification of China, Qin Shi Huang 260 BCE – 210 BCE) introduced a uniform copper coin when other forms of local currency were abolished. The coins were round with a square hole in the middle which was the common design for most Chinese copper coins up until the 20th century. The square hole denotes the earth whilst the circular coin represents the heaven. Due to the low value of an individual coin, the Chinese have traditionally strung a nominal thousand copper coins onto a piece of string. Government taxes were levied on both coins and products such as rolls of silk. Salaries were paid in “stones” (石, dàn) of grain during the Qin Dynasty and Han dynasties.

Song Dynasty

During the early Song dynasty (960–1279 CE), China again reunited the currency northern states which tended to prefer copper coins. The southern states tended to use lead or iron coins with Sichuan with its own heavy iron coins which continued to circulate for a short period into the Song dynasty.[6] By 1000 CE, unification (south of the Liao) was complete and China experienced a period of rapid economic growth. This was reflected in the growth of coining. In 1073 CE—the peak year for minting coins in the Northern Song—the government produced an estimated six million strings containing a thousand copper coins each. The Northern Song is thought to have minted over two hundred million strings of coins which were often exported to Inner Asia, Japan, and South-East Asia, where they often formed the dominant form of coinage. Song merchants rapidly adopted forms of paper currency starting with promissory notes in Sichuan called “flying money” (feiqian). These proved so useful the state took over production of this form of paper money with the first state-backed printing in 1024. By the 12th century, various forms of paper money had become the dominant forms of currency in China and were known by a variety of names such as jiaozi, huizi, kuaizi, or guanzi.

Yuan Dynasty

The Mongol-founded Yuan dynasty (Chinese: 元, 1271–1368) also attempted to use paper currency. Unlike the Song dynasty, they created a unified, national system that was not backed by silver or gold. The currency issued by the Yuan was the world’s first fiat currency, known as Chao. The Yuan government attempted to prohibit all transactions in or possession of silver or gold, which had to be turned over to the government. Inflation in 1260 CE caused the government to replace the existing paper currency with a new one in 1287 CE, but inflation that resulted from undisciplined printing remained a problem for the Yuan court until the end of the Dynasty.

Ming Dynasty

The early Ming dynasty (Chinese: 明; pinyin: Míng, 1368–1644 CE) also attempted to use paper currency in the early re-unification period. This currency also experienced rapid inflation and issues were suspended in 1450 although notes remained in circulation until 1573. It was only in the very last years of the Ming dynasty when Li Zicheng threatened Beijing in 1643 CE and 1644 CE that printing took place again. For most of the Ming China had a purely private system of currency for all important transactions. Silver, which flowed in from overseas, began to be used as a currency in the Far South province of Guangdong where it spread to the lower Yangzi region by 1423 CE when it became legal tender for payment of taxes. Provincial taxes had to be remitted to the capital in silver after 1465CE, salt producers had to pay in silver from 1475 and corvée exemptions had to be paid in silver from 1485 CE. The Chinese demand for silver was met by Spanish imports from the Americas, in particular Potosí in Peru and Mexico, after the Spanish became established at Manila in 1571. It circulated as minted Spanish dollars sometimes stamped with Chinese characters known as “chop marks” which indicated that they were verified by a merchant and determined to be genuine. Spanish silver also circulated as ingots (known as sycee or yuanbao) which weighed a nominal liang (about 36 grams) although purity and weight varied from region to region. The liang was often referred to by Europeans by the Malay term tael. The first Chinese yuan coins had the same specification as a Spanish dollar, leading to a continuing equivalence in some respects between the names “yuan” and “dollar” in the Chinese language.

Qing Dynasty

Late Imperial China maintained both a silver and a copper currency system. The copper system was based on the copper cash (wen). The silver system had several units which by the Qing Dynasty were: 1 tael = 10 mace = 100 candareens = 1000 (silver cash).

In 1889 CE, the Chinese yuan was introduced at par with the Mexican peso and was subdivided into 10 jiao (角, not given an English name, cf. dime), 100 fen (分, cents), and 1000 wen (文, cash). The yuan was equivalent to 7 mace and 2 candareens (or 0.72 tael) and, for a time, coins were marked as such in English.

The earliest issues were silver coins produced at the Kwangtung mint in denominations of 5 fen, 1, 2 and 5 jiao and 1 yuan. Other regional mints were opened in the 1890s producing similar coins. Copper coins in denominations of 1, 2, 5, 10 and 20 wen were also issued. The central government began issuing its own coins in the yuan currency system in 1903. Banknotes were issued in yuan denominations from the 2019 by several local and private banks, along with the “Imperial Bank of China” and the “Hu Pu Bank” (later the “Ta-Ch’ing Government Bank”), established by the Imperial government.

Republic of China

The Republic of China was founded after the Xinhai Revolution toppled the Qing Dynasty. The Nanjing Provisional Government of the Republic of China urgently needed to issue military currency for use in place of the previous Qing currency. Successively, each province declared independence from the Qing and issued their own military currency. In 1914, the National Currency Ordinance established the silver dollar as the national currency of the Republic of China. Although designs changed compared with Imperial era coins, the sizes and metals used in the coinage remained mostly unchanged until the 1930s. The majority of regional mints closed during the 1920s and 1930s, although some continued until 1949. From 1936, the central government issued copper ​12, 1 and 2 fen coins, nickel (later cuprous-nickel) 5, 10 and 20 fen and ​11yuan coins. Aluminium 1 and 5 fen pieces were issued in 1940.

The 1920s and 1930s saw the price of silver appreciate in the international market, increasing the purchasing power of the Chinese currency and leading to a massive efflux of silver out of China. It became evident to the Chinese government that it could not retain the Silver Standard without debt defaults increasing, and so chose to abandon it. The situation was exacerbated by the multitude of commercial, provincial and foreign banks issuing currencies all at different values.


In 1935, the Central Government enacted currency reforms to limit currency issuance to four major government controlled banks: the Bank of China, Central Bank of China, Bank of Communications and later the Farmers Bank of China. The circulation of silver dollar coins was prohibited, and private ownership of silver was banned. A new currency issued in its place was known as fabi (法幣, pinyin: fǎbì) or “legal tender“.

Customs gold units (關金圓, pinyin: guānjīnyuán) were issued by the Central Bank of China to facilitate payment of duties on imported goods. Unlike the national currency which suffered from hyperinflation, the CGUs were pegged to the U.S. dollar at 1 CGU = US$0.40.

Unfortunately, the peg was removed in 1935 and the bank allowed CGUs to be released for general use. Already awash with excessive paper currency, the CGUs only added to rampant hyperinflation.


After the defeat of Japan in 1945, the Central Bank of China issued a separate currency in the northeast to replace those issued by puppet banks. Termed “東北九省流通券” (pinyin: Dōngběijiǔshěngliútōngquàn), it was worth approximately 10 times more than fabi circulating elsewhere. It was replaced in 1948 by the gold yuan. The North-eastern Provinces yuan was an attempt to isolate certain regions of China from the hyperinflation that plagued the fabi currency.

Gold yuan[

The onset of World War II saw a sharp devaluation of the fabi currency. This was largely due to unrestrained issuance of the currency to fund the war effort. After the defeat of Japan and the return of the Kuomintang Central Government, a further reform was instituted in August 1948 in response to hyperinflation. The Gold Yuan Certificate replaced the fabi at the rate of 1 gold yuan = 3 million yuanfabi = US$0.25. The gold yuan was nominally set at 0.22217 g of gold. However, the currency was never actually backed by gold and hyperinflation continued.


Finally, in 1949, the Kuomintang again announced a reform with the introduction of the Silver Yuan Certificate, returning China to the silver standard. The silver yuan would be exchanged at 1 silver yuan = 100 million gold yuan, and was backed by silver dollars minted by the Central Mint of China.

Mainland provinces. It was replaced by currency issued by the People’s Bank of China which This currency was short-lived, as the Communist Party of China soon gained control of the was less prone to inflation.

After the retreat of the Kuomintang to Taiwan, the silver yuan remained the de jure legal currency of account of the Republic of China, although only Taiwan dollars issued by the Bank of Taiwan were circulating in areas controlled by the ROC. After a currency reform in 1949 created the New Taiwan dollar, the statutory exchange rate was set at 1 silver yuan = NT$3.

An amendment was passed in 2000 to make the New Taiwan dollar the official legal currency of the Republic of China.

The Wang Jingwei government in Nanjing established the collaborationist Nanjing Reformed Government (南京維新政府) in 1938. This was later reorganized into the Nanjing National Government (南京國民政府) in 1940. They established the Central Reserve Bank of China (中央儲備銀行, pinyin: ZhōngyāngChǔbèiYínháng) which began issuing CRB yuan in 1941. Although initially set at par with the Nationalist fabi, it also was arbitrarily changed to equal

The currency became legal tender in China commencing in 1937. It was later replaced by issues from puppet banks. However, the currency remained in force in Hong Kong between 1941 and 1945. Initially set at HK$2 = JMY1, the Hong Kong dollar was largely preferred by locals and hoarded away. In order to address this, the Japanese government made possession of Hong Kong dollars illegal in 1943 and required a conversion to JMY at 4 to 1.

People’s Republic of China

Copy a RMB200 note issued by the People’s Bank of China in 1949.

The Communist Party of China gained control of large areas of the northeast of China during 1948 and 1949. Although several regional banks were established, they were united in December 1948 as the People’s Bank of China. Established in Shijiazhuang, the new bank took over currency issuance in areas controlled by the Communist Party.

After the promulgation of the People’s Republic of China, there was a brief period where 100,000 gold yuan could be exchanged for 1 yuanRenminbi.

Renminbi notes were issued in 12 denominations: 1, 5, 10, 20, 50, 100, 200, 500, 1000, 5000, 10,000, and 50,000 yuan. These denominations were subdivided into 62 styles. After adjusting the currency value with ratio 1:10,000 in March 1955, the second edition of Renminbi were issued in 12 denominations, including 1 fen, 2 fen, 5 fen, 1 jiao, 2 jiao, 5 jiao, 1 yuan, 2 yuan, 3 yuan, 5 yuan and 10 yuan.

The People’s Republic of China began issuing aluminum coins in December 1957, in denominations of 1, 2 and 5 fen. From 1961, China outsourced the printing of 3, 5 and 10 yuan notes to the Soviet Union.

The fifth and latest editions of the currency of the People’s Republic of China have been produced since 1 October 1999. Notes have been produced in 8 denominations: old types of 1 fen, 2 fen and 5 fen, as well as new issues depicting Mao Zedong: 5 yuan, 10 yuan, 20 yuan, 50 yuan and 100 yuan. In 2004, a 1 yuan note depicting Mao Zedong first came into production. Since 1999, coins have been produced in denominations of 1 fen, 2 fen, 5 fen, 1 jiao, 5 jiao and 1 yuan.

With acknowledgements to Wikipedia

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