Yuan
The yuan is the unit of account used to state an amount of renminbi, much as the pound is a unit of sterling. In everyday use, people often use yuan, RMB and CNY interchangeably, although they have different technical meanings.
When a supplier writes "¥85,000" or "85,000 yuan" on a quotation, the figure is a number of yuan, the basic unit of the renminbi. The relationship is the same as between the pound and sterling: one names the currency, the other counts it. The yuan is divided into ten jiao and one hundred fen, although invoices for goods are normally rounded to whole yuan or two decimal places.
The word causes confusion in two ways. First, the ¥ symbol is shared with the Japanese yen, so a document that shows only a symbol and no currency code is ambiguous. Second, people use yuan, RMB and CNY interchangeably in conversation, which hides the difference between the onshore and offshore markets that determines the rate actually paid. A quotation that mixes the terms is not wrong, but it leaves the important question, which market, unanswered.
In payment instructions and contracts, precision is cheap. Use the ISO code CNY for the currency, state whether the amount is to be received onshore in Mainland China, and avoid relying on a bare ¥ symbol. A bank reviewing the payment will match the currency on the instruction against the invoice, and an avoidable mismatch is one more reason for a query.
In practice
Do not rely on the ¥ symbol alone in an invoice or contract. It is used for both the Chinese yuan and the Japanese yen, so state the currency code explicitly.
Commonly confused with
| Term | How it differs |
|---|---|
| Renminbi | The yuan is the unit of account; renminbi is the currency. A price of 100 yuan is an amount of renminbi. |
See also
- RenminbiRenminbi is the official name of the currency of the People’s Republic of China. RMB is the common abbreviation, while yuan is the unit in which renminbi amounts are counted.
- CNYCNY is the official ISO 4217 currency code for renminbi. In financial-market discussions, CNY also commonly refers to the onshore RMB market and exchange rate inside Mainland China.
- CNHCNH is the market convention used to identify renminbi traded and held outside Mainland China, particularly in Hong Kong. CNH is not a separate sovereign currency or an independent ISO 4217 currency code.