History of the Chinese Yuan

The Chinese Yuan is the latest currency in a very colorful history.  China was one of the first nations on earth to create currency to take the place of barter.  The first coins, made from bronze and cast into molds, were made around the 4^th century BC in central China.  These coins had a round hole in the middle so that they could be kept on strings.  Nearly a century later the first emperor of China, Shi Huangdi, changed that to a square hole.  The design did not change for the next 2,000 years. 

Before the Yuan, China experimented with paper money around 910 AD during the Five Dynasties period.  The famous explorer Marco Polo marveled at the paper currency, stating that the emperor could print enough money to buy all the goods in the world at no cost to himself.  Paper money was also used in Szechwan, an area that experienced frequent copper shortages and reverted to a currency based on iron. 

Much later, in 1889, the Yuan was introduced as a silver coin derived from the Spanish dollar (peso).  The peso had been widely circulated in South East Asia since the 1600’s because of the Spanish presence in nearby Guam and the Philippines.  The Yuan replaced copper cash and silver ingots called sycees.  Around that same time the Yuan was also issued in banknotes.

In 1903 the government started issuing other coins in the Yuan currency system.  These were brass 1 cash, copper coins in the denominations of 2, 5, 10 and 20 and silver coins in 1, 2, and 5 cash.  The sizes of the coins and metals used did not change after the revolution but stayed the same until the 1930’s when nickel and aluminum coins were introduced.

The modern Chinese Yuan is also called the Renminbi (RMB) which translates as “the peoples’ currency”.  It was first issued by the Chinese Communist Party’s People’s Bank of China in December of 1948.  At that time, China was involved in a civil war between the Communist Party and the Nationalists.  At the close of that conflict the communists won the mainland and had to address the high inflation the country’s economy was saddled with.  Thus, 1955 a second series of Yuan was issued that replaced the old Yuan at a rate of 10,000 old Yuan to one new Yuan.  The economy was stabilized and the country entered a new age with high hopes.