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Chinese currency (Yuan Renminbi, CNY)
Note 1 - Some form of currency has been used in China dating back to the New Stone Age. The Chinese are also credited with inventing paper money in the 9th century.
The chinese currency used today on the mainland of the People's Republic of China, is Renminbi, (abbreviated RMB) which litterally means "people's currency". The units for Renminbi are known as the Yuan, Jiao, and Fen: 1 Yuan = 10 Jiao = 100 Fen.
Hong Kong, Macao and the Republic of China (Taiwan) have their own monetary policies and currencies that may not be compatible with the Renminbi.
Note 2 - The U.S. Treasury Department's most current assessment of foreign trading partners' exchange rate policies failed to acknowledge that China was manipulating the value of its currency to better its international competitiveness. However, when further investigating the subject, all evidence shows that China has crossed lines that have been established to determine whether a nation has been involved with currency manipulation several times in the past.
This currency manipulation is particularly problematic when considering the enormous size and impressive continual growth of trade imbalances between the United States of America and China. Approximately a quarter of the entire U.S. trade deficit, which has reached a shocking 6% of gross domestic product (GDP) can be attributed to the bilateral deficit with China. It is widely agreed upon by experts that this deficit is unsustainable and that the process of its unwinding could be costly for both the United States and its major trading partners. The adjustment will become continually agaonizing the more this deficit increases. China's currency policy is the primary hurdle to reducing this deficit now rather than later (when the costs will be higher).
As previously noted, China has been in violation of all established currency manipulation standards (September 25, 2006).
Note 3 - China's role in global imbalances is even larger than the previous numbers might suggest. A significant increase in the value of the Chinese currency, the Renminbi, is needed to reduce the imbalances, however China has blocked any significant increase on the value of the Renminbi by heavily intervening in the foreign exchange markets, buying upwards of $15 billion to $20 billion per month for several years to prevent market pressures from increasing its currency's value. China has avoided international sanctions, to this date, by portraying its currency undervaluation as an off-budget export and job subsidy.
In keeping the Renminbi undervalued, China has also managed to deter several other Asian countries, such as Japan and India, from allowing their currencies to rise against the U.S dollar out of fear of losing their competitive position against China. Thus, China's policy on currency has removed practically all of Asia from the international adjustment process. (march 2006)