Business

CNY vs CNH - Differences Between Two Types of Renminbi

Vivien Thuri

16.02.24 (updated more than 1 year ago)

Read time 3 minutes

China’s currency - the Renminbi - ranks as the fifth most popular global payment currency.¹

On top of this, China has the second largest GDP in current dollars, making it a key target market for international business.²

But if you’re looking to break into this market, then you need to understand the Renminbi, which actually refers to two different currencies: CNY and CNH.

This article explores the ins and outs of the Renminbi, Yuan, and the difference between CNH and CNY.

When importing from China, you can use Wise Business and payout in CNY to forget about long transfer times and hefty fees.

Understand Chinese RenMinBi

Before looking at the difference between CNY and CNH, let’s first take a look at Renminbi and Yuan.

What is RenMinBi (RMB) and what is Yuan?

Renminbi (RMB) is the official name given to the currency belonging to the People’s Republic of China.

The name is the equivalent of Pound Sterling or Australian Dollar, for example.

Yuan, however, is the name given to the unit of currency.

Another example makes this distinction clear: although the official name of the currency in North America is the “US Dollar”, in day-to-day life it’s simply referred to as a dollar.

This is the exact same with Renminbi and Yuan, respectively.

CNY vs CNH

From here, there is another distinction to be made about Renminbi/Yuan.

There are two types of Renminbi - and, by implication, two types of Yuan. These are: CNY and CNH.

CNY is the Chinese Yuan traded in the onshore market;
CNH is the Chinese Yuan traded in the offshore market.

CNH and CNY are valued at the same amount in Renminbi, and both of them are currencies of the same country (China). This means that CNH exchanges to CNY at a ratio of 1:1.

Despite these similarities, CNY and CNH are not the same currency.

They are exchanged at different amounts, regulated by separate authorities, traded at different prices and have differing levels of restrictions.

What are the differences between CNY and CNH

Here’s a summary of the main differences between CNY vs CNH.

CNY	CNH
People's Bank of China (PBOC) controls the reference rate, in which CNY can only fluctuate within a 2% range of the reference rate	Free floating exchange rate determined by the market
Regulated by the People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE)	Regulated by the Hong Kong Monetary Authority
Restrictions exist for currency trading	Can be traded without restrictions
Only residents of Mainland China have access to the CNY market	Residents and non-residents of Hong Kong, as well as certain residents of Mainland China, have access to the CNH market³

What is CNH used for?

CNH is the type of Renminbi traded in the offshore market.

The offshore market simply refers to everywhere outside of mainland China.

Hong Kong is considered part of the offshore market and thus trades using CNH.

CNH is traded freely in currency markets across the globe and its price is determined by market forces.

What is CNY used for?

CNY, on the other hand, is the type of Renminbi traded in the onshore market - in other words, within mainland China.

The economy of mainland China is controlled by the government, with the price of CNY being controlled by the People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE).

The reference rate for CNY is set daily and is only allowed to fluctuate within 2.0% of the reference rate each day.³

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Can you convert CNH to CNY?

Within China, CNH and CNY amount to the same value.

This means you can exchange CNY for CNH at a ratio of 1:1.

However, when converting CNH and CNY into a foreign currency, the exchange rate will be different for each one. You can always check the latest exchange rate for USD to CNY.

What does this mean for businesses importing from China?

When importing goods from China, it’s important to be aware of what type of Renminbi you’re using - the difference between CNH vs CNY can cost you unnecessary money.

When you’re sending money to China with a currency conversion, it’s likely to be in CNY - but if you’re receiving money from China, then it’ll probably be in CNH.

Given this complex payments landscape, you need a provider that can give you the best exchange rate possible, such as Wise.

With Wise, you can send money to China having it exchanged at the mid-market rate.

You can also find out the best time to exchange your money to CNY, using Wise’s exchange rate tracker - giving you live notifications about changes in the rate.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. You can also Send money to 160+ countries.

Read the guide on how to open a Wise Business account

Some key features of Wise Business include:
Major local account details to receive international payments with ease No monthly account fees just a simple one-off fee for account details Receive payments from e-commerce platforms (such as Amazon or via Stripe). Create invoices using the Wise invoice generator or invoice templates. Accounting integrations, including a QuickBooks Bill Pay connection. Bill payments will be synced, matched, and categorized in QuickBooks for simple reconciliation. Access to BatchTransfer: Signing up to Wise Business allows access to BatchTransfer which you can use to pay multiple invoices in one go.

Some key features of Wise Business include:

Major local account details to receive international payments with ease
No monthly account fees just a simple one-off fee for account details
Receive payments from e-commerce platforms (such as Amazon or via Stripe).
Create invoices using the Wise invoice generator or invoice templates.
Accounting integrations, including a QuickBooks Bill Pay connection. Bill payments will be synced, matched, and categorized in QuickBooks for simple reconciliation.
Access to BatchTransfer: Signing up to Wise Business allows access to BatchTransfer which you can use to pay multiple invoices in one go.

Open a Wise Business account online

Sources:

SWIFT
International Monetary Fund - GDP, current prices
Mizuho Financial Group - China's dual exchange rate system (CNY vs CNH)

All sources checked February 2024

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