Renminbi and Foreign Currency Management

The Renminbi (RMB) is the legal currency of China. It is issued and managed by the People's Bank of China. The current exchange rate of the RMB is set by the People's Bank of China and published by the State Administration of Foreign Exchange (SAFE). The foreign currency in China is managed by the SAFE.

In 1994, China reformed the foreign currency system, merged the RMB exchange rate and carried out the bank currency settlement and selling system. It then created a unified inter-bank foreign currency market. Based on it, foreign currency trade from foreign invested enterprises is included in the inter-bank currency settlement and selling system. From December 1, 1996, China formally accepted the eighth article of the World Monetary Fund agreement and fixed the RMB exchange rate.

In the meantime, China actively participates in and promotes financial cooperation between the ASEAN and the China-Japan-Korea group (10'3) on bilateral currency exchange. During the Asian financial crisis, in particular, China not only insisted that the RMB would not devaluate, but also provided financial assistance to the countries in trouble. It became a key stabilizer for the Asian financial market.

By the end of 2003, China's foreign reserves have reached US$403.3 billion, an increase of US$116.8 billion over last year. The RMB currency rate remains stable.