Difference Between Rmb and Yuan

We often talk about countries’ currencies in our textbooks, in our daily lives, etc. People usually discuss the value of currency devaluation, currency inflation, and many other things. Rmb and Yuan are the terms related to the currency, used interchangeably sometimes but are different from each other.  

Rmb vs Yuan  

The main difference between Rmb and Yuan is that Rmb is the authorized legal tender of China, whereas Yuan is the official unit for the transaction in Rmb. Rmb is used as the usual medium of exchange in China. Yuan is used for the financial and economic system in China. The difference between the two has always been quite debatable.  

Rmb and Yuan

Rmb is the legal tender for China. The normal day-to-day transactions in China occur in Rmb. It is the most official unit in comparison to any other unit being used in China. The official currency denotes the term of money which is used in the country for basic to official transactions.  

Yuan is many times used as a substitute for Rmb, but it is different from Rmb. Yuan is defined as the official unit used for transacting in China. The basic unit used for financial and legal transactions happening in the country is Yuan. It is the other term for currency. The word Yuan is used when money is to be considered in terms of size.  

Comparison Table Between Rmb and Yuan 

Parameters of Comparison Rmb Yuan 
Meaning China legal tender. China official unit for transactions. 
Purpose It distinguishes between Chinese currency and other currencies. Indicates the value per value of an item in terms of yuan. 
Acceptance More formal acceptance Less formal acceptance 
Usage Treated as simple money Considered for country’s economic system 
Full Name Renminbi Yuan 

What is Rmb?  

Rmb is the short abbreviation used for the term Renminbi, which is defined as the legal tender of China. It is usually defined as the people’s money because the daily transactions in China occur in the denomination of Rmb.  

It came into usage after the year 1949. As China shifted its policy from central planning towards the market economy, Rmb was devalued to increase the drive of Chinese industry. The symbol which represents Rmb is ‘元.’  

It is the most common word you will observe is in China or by Chinese people because it is accepted throughout the territory. The basic purpose of the introduction of Rmb in China was to unify the Chinese people as several currencies were present and used before the introduction of Rmb in China.  

Different currencies have different units. Rmb units are the Jiao, the Mao, or fen, just as America has various units such as a dime, dollar, etc.  

Rmb is available in the form of banknotes and coins as well. The various denominations of banknotes are ¥0.1, ¥0.5, ¥1, ¥5, ¥10, ¥20, ¥50, and ¥100. The denominations are being printed in simple Chinese written language on the banknotes. The various denominations available range from 1 fen to 1 Yuan.  

What is Yuan?

Yuan is the base unit of Rmb. It has been derived from the word ‘Peace’ and is normally pronounced as ‘’Kuai.’ It is used in the Chinese economic and financial systems. It is usually interchanged with the official currency of China.  

Foreign investments are widely made in the units of the Yuan. It is held by the people of China in great self-esteem. Indian denominations are presented in the form of rupees and paisa. Likewise, Chinese currencies are represented in the form of Yuan and Jiaos.  

It is the scale unit Rmb. They previously prevailed in the economy in the form of silver coins. It is abbreviated as CNY in China but CNH in Hong Kong.  

The value of the yuan affects the price of the products in the countries. When the value of the yuan is low, as a consequence of it, the value of the goods imported from China to other countries reduces.  

It is the unit in which the prices are measured. Yuan is present in the denominations of one, two, five, ten, fifty, one-hundred-yuan notes. It is also present in the form of coins which are represented in the form of fen and Jiao. It corresponds to the use of the dollar in the USA.  

Main Differences Between Rmb and Yuan  

  1. Renminbi, abbreviated as Rmb, is the term used to define the legal tender of China, whereas Yuan is the term that is defined as the legal unit for the transactions occurring in China.  
  2. Rmb is the base of difference between Chinese and other currencies, whereas Yuan signifies the per-unit value of an item in Yuan.  
  3. Rmb is more formally accepted in China, where Yuan has less formal acceptance than Rmb.  
  4. Rmb is signified in the name of people’s money, whereas Yuan is used for countries’ financial and accounting systems.  
  5. Renminbi is abbreviated as Rmb, whereas Yuan is abbreviated as CNY.  

Conclusion  

Both Rmb and Yuan are the terms used for the Chinese currencies. Both the terms are often confused with one another but have some distinctions from each other.  

The Chinese currency has shown wonderful growth in the past few years. Various currencies were prevalent in the country previously, but to unify the country and the people of the country, particular currencies were introduced.  

They both are related to each other, one being the legal currency of a country and the other being the base unit of that currency. China has gone through many changes in the previous year regarding the currency valuation, unification of the currencies, and many other issues regarding the economy, which had many impacts on the valuation of the currency. But China has made great growth in the latest years.  

Chinese currency valuation has always been a sore subject for the globe. A country’s currency plays a vital role for the country and globe as well.  

References

  1. https://www.sciencedirect.com/science/article/pii/S1049007807000127
  2. https://link.springer.com/article/10.1007/s11146-015-9513-4
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