Thursday, July 21, 2005

DIFFERENCE BETWEEN THE YUAN AND RENMINBI

What with all the news about China's exchange rate regime today, google is going crazy with people trying to figure out just what exactly the difference is between the yuan and renminbi (at least as far as I can tell from the page referrals).

This is what I wrote to explain the difference before. I think it still does a good job:

Once and for all, here is the difference between the yuan and the Renminbi. Renminbi, loosely translated as the people's notes, is the official name of China's currency. Yuan is the unit of account. This distinction confuses Western journalists to no end. So it would be proper to say that, "China may revalue the Renminbi," or that, "Average wages in Chinese manufacturing are 917 yuan per month." But not that, "China may revalue the yuan," or, "This bun bao costs 3 Renminbi." Get it? Okay. Now you know, and feel free to correct people--especially know-it-all journalists--when they screw it up.

Now that you've made it this deep into Sino-American monetary relations, I'm certain you have whet your appetite for more.


UPDATE: Paul Krugman doesn't care if there is a difference and if he's using the wrong term. He writes me:

My understanding is that yuan is to renminbi as pound - also a denomination - is to sterling. Very proper and correct people say the sterling exchange rate, but most people will have no idea what you're talking about, and the normal usage is pound. The same is quickly becoming true for China, and it would seem stuffy if I said RMB all the way.

Neither does Louis Uchitelle (a very good labor journalist) or the copy editors over at NYT, apparently.

But what do I know, I never won a Clark medal.

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