RMB history

Apparently there's RMB before there's PRC! RMB became a currency in 1948, Dec 1. (So it has a "brief" history of 60 years now) It was pegged at less than 3 RMB/USD - which is clearly quite dislocated from the commercial reality and RMB's real purchasing power. And of course it's not a freely circulated currency, so as a foreigner, you have to use foreigner certificates. Because RMB was pegged so high, there are dual rates running, and the RMB also continued to depreciate, until almost 8 RMB/USD before China's central bank pegged it to a basket of currency at close to that value. After that, the RMB appreciated to 6.8 now.

A country's currency is a major reflection of its history and the underlying economy...and the development of RMB reflected how China as an economy has developed...the closed door policy, the gradual opening up, and the RMB strengthening in the past few years, as one of the world's fastest largest large economies, with now the world's largest foreign currency reserve (China is now the single biggest buyer of US Treasury - and hence a "lender" in effect to the US Government and George Bush for many years!) I need to study this more, and make a "reflection on RMB" blog entry for RMBCity!!

PS - this remains me of my work by Cai Guoqiang who used the world's "shortest lived currency" - the Kuomintang currency issued during the civil war in China by the KMT Government - as the basis. This series of KMT bank note is precisely what the RMB tried to replace. In his signature style, Cai "exploded" the bank note - making an ironic take on creation and destruction/life-span, and what's valuable vs. what's not