China promoting use of coins over banknotes with machines that exchange banknotes for coins; intention is to replace 10-cent, 50-cent and 1-yuan banknotes with coins of same value, though country's operation that makes banknotes employs 30,000
March 17, 2014
(Financial Services Monitor Worldwide)
– Bank notes may be more popular than are coins in China, but the Peoples' Republic appears to have thoughts otherwise.
According to the news reporting agency machines are being installed across China through which bank notes can be exchanged for with the agenda being to promote the use of coins.
China intends to replace its low denomination 10-cent, 50-cent, and 1-yuan bank notes with coins of the same values.
All coins and bank notes are produced by the state owned China Banknote Printing and Minting Corporation, whose headquarters are in Beijing. Coins are minted at Nanjing, Shanghai, and Shenyang in addition to Beijing.
Additional CBPMC bank note printing facilities are located in Chengdu, Nanchang, Shanghai, Shijiazhuang, and Xi'an. The special paper on which these notes are printed is also produced by CBPMC. The paper is made at Baoding and Kunshan. The People's Bank of China has its own research division where printing technology is developed in an effort to thwart counterfeiters.
According to the CBPMC web site, "China Banknote Printing and Minting Corporation (CBPM), with a staff of nearly 30,000, is under the direct leadership of the People's Bank of China. Its 22 enterprises and one technical center are specialized in bank note printing, minting, bank note paper making, machinery of bank note printing and minting, credit cards, high-purity gold and silver refining, printing of value-added fax invoices, negotiable securities, banking vouchers, high-level anti-counterfeiting certificates."
Modern China's coinage began in 1955 when 1-, 2-, and 5-fen aluminum composition coins were introduced. Brass composition 1-, 2-, and 5-jiao and copper-nickel 1-yuan coins were added to this mix in 1980. (It takes 10 fen to equal one jiao, and 10 jiao to equal one yuan.) The 1- and 2-jiao coins ceased production in 1981, while the 5 jiao and 1 yuan were no longer produced after 1985.
An aluminum 1-jiao, brass 5-jiao, and nickel-clad steel 1-yuan were introduced in 1991, while the 1- and 2-fen coins were being withdrawn. Production of the 5-fen coin was halted in 1992.
After this time low denomination coins were still available in annual mint sets, but it wasn't until 2005 that these coins were again made available for general circulation. Between 1999 and 2002 new designs were introduced on the 1- and 5-jiao an on the 1-yuan coins.
According to the most recent issue of the MRI Bankers' Guide to Foreign Currency, People's Bank of China bank notes are currently issued in denominations of 1, 5, 10, 20, 50, and 100 yuan, each depicting an identical vignette of Mao Zedong on the front.
According to MRI, "All notes of 1 yuan to 100 yuan dated 1980 to 1996 and the commemorative notes of 50 yuan of 1999 and 100 yuan of 2000 are redeemable. Please note that notes of 1, 2, and 5 jiao are only worth 0.10, 0.230, and 0.05 yuan respectively."
MRI sets the official exchange rate at 6.2 yuan to the U.S. dollar.
Some of the language surrounding China's currency system may be confusing. The currency system is called the renminbi, which translates to "people's currency." The yuan translates to "dollar," but it is often referred to as "kuai" in local dialects. The jiao or tenth of a yuan is also known as a "mao."
Part of the logistical problem China faces in encouraging circulation of coins rather than bank notes is that there is no consistency nationally in how they are favored.
No official reason was given for why the government will begin encouraging the use of more coins.
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