China needs a larger currency note
China’s RMB yuan currency comes in 1, 5, 10, 20, 50, and 100 元 denominations. It fluctuates, but 100 RMB is roughly equivalent to less than $15 USD.
Now, imagine if the largest bill in the US or Canada was $15. Or if €10 was the largest note you could carry around in the EU. Now also imagine that in addition to these small notes, North America or Europe were primarily cash-based societies. This is the situation in China.
What does this result in?
- Carrying a brick of 100 RMB notes to pay your 3 month rent deposit because your landlord only accepts cash.
- Men who carry murses because 20,000 RMB does not fit in a wallet.
- Common sights of people at banks pulling out stacks upon stacks of a million yuan in 100 RMB notes to deposit.
- ATM lineups that take forever (ATMs have 3-5000 RMB withdrawal limits per transaction, requiring you to repeat the process each time until you have as much as you need).
- ATMs that are often out of cash.
Not to mention the fact that most people (well, not me) are often walking around with a ton of cash on them. If China weren’t one of the safest countries in the world, I’d feel extremely uneasy about all of this.
In the last few years – especially in Shanghai – debit cards and online banking use has risen dramatically. The infrastructure has always been there, but it seems only to have really caught on in the last 5 years or so to the point that you can walk into most major stores and be able to use a bank card to purchase something.
But cash isn’t going away in the foreseeable future, so this doesn’t change the fact that China needs a higher currency note. I’m no economist, so I’m sure there’s some complicated reason why this hasn’t happened yet, but I don’t see why they just can’t issue a 500 RMB or 1000 RMB note like Hong Kong has with the HKD. It would make rent day much easier.
I heard, from a completely unsubstantiated source (my husband), that its to combat counterfeiting. How/what/why? Beats me.
Probably has a lot to do with it. On the other hand, I’ve heard that most counterfeiters now focus on smaller bills now (like 10s and 20s) because 100 RMB notes are almost always inspected.
Considering on my recent trip to Beijing nobody wanted my 100 kwais, its probably a good thing.
But
You obviously have never been to Mongolia, where the biggest note the Togrog is 10,000 which is worth £4.
Except when I went to change money at the spiv on the border they gave me 500 tong rog notes for the £200 I changed, I ended up carrying a brick all week.
Korea is much the same, but at least they have a 50,000 note now, their 10,000 used to be worth $6.
Uzbekistan is THE worst case, I changed £50 and ended up with a plastic bag full of bricks about the size of a CRT TV.
Well Ken, you obviously have never been to Zimbabwe when the Zimbabwean dollar was 7.1 million to $1 USD. I had to hire a moving company to bring all the bills required to buy a 6 pack of beer.
Yeah but zimbabwe money isn’t normal, while Korean and Mongolian money is normal economic non dead currency.