We talk about countries’ currencies in our textbooks, daily lives, etc. People discuss the value of currency devaluation, currency inflation, and many other things.
Rmb and Yuan are terms related to the currency, used interchangeably sometimes but differ.
Key Takeaways
- RMB, or Renminbi, is the official currency of the People’s Republic of China, while Yuan is the primary unit of the currency.
- RMB is the broader term for the entire Chinese currency system, while Yuan refers to the denomination used in daily transactions.
- Both RMB and Yuan are used interchangeably in casual conversations, but RMB is the correct term when discussing the currency on a macroeconomic level.
Rmb vs Yuan
The 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 is the legal tender for China. The typical day-to-day transactions in China occur in Rmb. It is the most official unit compared to any other team used in China.
The official currency denotes the term of money used in the country for essential to official transactions.
Yuan is used as a substitute for Rmb, but it differs 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 considered in terms of size.
Comparison Table
| Parameters of Comparison | Rmb | Yuan |
|---|---|---|
| Meaning | China legal tender. | Considered for the country’s economic system |
| 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, defined as China’s legal tender. It is defined as the people’s money because the daily transactions in China occur in the denomination of Rmb.
It came into use 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.’
The most common word you will observe in China or by Chinese people because it is accepted throughout the territory.
The primary purpose of introducing 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 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 derives from the word ‘Peace’ and is normally pronounced as ‘’Kuai.’ It is used in the Chinese economic and financial systems. It is interchanged with the official currency of China.
Foreign investments are widely made in the units of the Yuan. The people of China hold it 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 yuan’s value 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, and one-hundred-yuan notes.
It is also present in coins, represented as fen and Jiao. It corresponds to the use of the dollar in the USA.
Main Differences Between Rmb and Yuan
- Renminbi, abbreviated as RMB, is the term used to define the legal tender of China. In contrast, Yuan is the term that is defined as the legal unit for the transactions occurring in China.
- Rmb is the base of the difference between Chinese and other currencies, whereas Yuan signifies the per-unit value of an item in Yuan.
- The RMB is more formally accepted in China, whereas Yuan has less formal acceptance than Rmb.
- Rmb is signified in the name of people’s money, whereas Yuan is used for countries’ financial and accounting systems.
- Renminbi is abbreviated as Rmb, whereas Yuan is abbreviated as CNY.
- https://www.sciencedirect.com/science/article/pii/S1049007807000127
- https://link.springer.com/article/10.1007/s11146-015-9513-4
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