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About Money

Chinese currency is called Renminbi (Ren2min2bi4).  You would ask for Renminbi when exchanging money or a traveler's check.  There is only one kind of currency in China today.  Many old guidebooks refer to FEC, Foreign Exchange Units.  In the past, foreigners and foreign companies could only use FEC.  The currency was not recognized world-wide and had limited use in China.  You could exchange it for foreign currency at arbitrary rates.

In 1994 the government and the Bank of China abolished the FEC system and allowed a limited float of the Renminbi on the international currency markets.  At the time of this writing, the exchange rate for American dollars is roughly  6.2 RMB to 1 USD.

The following is an old list of currency rates (2012).  This is just a thumbnail guideline.  I do not intend to update the list regularly.  For current rates, type "exchange rate" and  "foreign currency" into one of the search engines such as Alta Vista.

Australian Dollar 
Brazilian Real 
British Pound 
Canadian Dollar
European Union Euro
New Zealand Dollar 
Taiwan N.T. Dollar 
United States Dollar 

Talking About Money

Once you have exchanged money the next step is to spend it.  The most common notes are 2, 5, 10, and 100 Yuan.  Yuan is a measure word for qian2 (money).  The yuan is the basic unit, as the dollar is the basic unit.  The yuan is commonly called a kuai4, as the dollar is commonly called a buck.  In the list of money, the readers were reading the number columns.  So some readers said yuan2 and some readers said kuai4 for the same item.  This will give you a broader range of money expressions.
United States
1 yuan2 qian2 = 1 kuai4 qian2
1 dollar of money = 1 buck of money
10 jiao3 qian2 = 10 mao2 qian2 = 1 kuai4 qian2
10 dimes = 1 buck
10 fen1 qian2 = 1 mao2 qian2
10 pennies = 1 dime
One yuan is divided into 100 units called fen1, like the US penny.  They are about equally worthless in their respective cultures.  Ten fen1 equals one jiao3.  As jiao3 is a measure word, it is proper to say yi4 jiao3 qian2 - one dime.  The jiao3 is commonly called the mao2.  In fact, you will seldom hear anyone say jiao3.

Most units of change smaller than a kuai4 are expressed in mao2.  Instead of saying thirty fen1 (thirty cents), you must learn to say san1 mao2 (three dimes), or san1 mao2 qian2.  You will notice that when both mao2 and fen1 are included in the amount, it is permissible to delete fen1 from the expression.  Thus:

    2.59 liang3 yuan2 wu3 jiao3 jiu3 fen1 qian2 liang3 kuai4 wu3 mao2 jiu3 fen1 two dollars and fifty-nine cents two fifty-nine
     58.60 wu3shi2ba1 yuan2 liu4 jiao3 qian2 wu3shi2ba1 kuai4 liu4 fifty-eight dollars and sixty cents fifty-eight sixty

A complete page of Money terms and expressions with pronunciation

Income in China

Trying to take a snap-shot of the day-to-day Chinese economy is extremely difficult at this point.  The economy is evolving.  The central government is shedding more and more control and placing both responsibilities and costs back into the market place.  As private ownership of businesses increases, there will be a gradual move toward private insurance for health care, private ownership of housing, lowered subsidies on utilities, and inevitably, increased taxes.  At the same time, while salaries will rise, they will do so unevenly.  When everyone was employed by work-units of the government and the government paid for housing and health, wages only had to cover small living expenses.  There were few consumer goods.

In 1996 net income per capita for urban residents was 4,377 yuan, and in the rural areas net income per capita hit 1,900 yuan according to Chinese government statistics.  In 2004, urban per capita income reached 9,422 yuan (US$1,380) and in rural areas net income per capita hit 2,936 yuan (US$430). By 2009-2010, urban per capita income reached 14,213 yuan. Income in urban areas has increased up to 10% per year. In 2008, per capita rural income ranged from 2,373 (Guizhou), 2,788 (Tibet) to 9,439 (Beijing), 10,144 (Shanghai). The poorer areas are in the west and southwest where many of the minority peoples live (Guan and Men, 2009). Figures for 2011 in the China Daily are: 21,810 yuan ($3,434) for urban residents and 6,977 yuan ($1,095) per capita for rural residents. Recognize that per capita includes infants, the unemployed and retired people.  It does not include unreported births.  Chinese demographers estimate that up to 30% of births after 1990 go unreported to avoid fines and taxes.

In China, an income of 20,000 RMB a month is a good middle-class income.  That usually is in addition to housing, which until recently, was provided by the work unit.  As part of modernization, the government is encouraging ownership of apartments.  Standard expenses include 20% co-pay for health care, charges for utilities, transportation, and taxes.  In the United States, housing consumes 30 to 50% of net income, after taxes.  In China, although housing is not yet an expense, 40% of net income is dedicated to food in a middle-class household. Kindergarten/preschool would cost 100 yuan per month.  Most of the rest of the income would be discretionary.  While the proportion of discretionary income is currently larger in China, the amount is small.  It is difficult to compare the two systems, but in each the middle-class has a small amount of discretionary income for luxuries like travel, technology, and entertainment.  In each, the middle-class has to save to afford large items.  In China, they have to save much longer for the same item.  Imported goods cost roughly the same in China as they do in the country of origin.  That makes them very expensive in RMB.  Domestic durable goods vary.  Well-made, wooden furniture is as expensive as its imported counterpart.  Televisions, refrigerators, and other large appliances are less expensive than imported versions.

The contrast between urban and rural areas is still striking.  While the average incomes are vastly different, the government is trying to raise the average rural income with versions of price supports for crops, lower tax rates, and encouraging the development of village industries.  It takes time to spread modern conveniences to rural areas.  Expansion of telephone, cable television, paved roads, trains, and buses all face the barrier of size and distance.  Cellular technologies and dish antennae help solve the first, but distribution of goods and services waits for the development of better transportation networks.

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