CNY vs CNH: What is the difference between the two Chinese Yuans?

China’s currency plays an enormous role in global commerce. What’s crucial to understand is that “Yuan” (officially called the Renminbi or “people’s money”) actually refers to two different types of currency that are closely related. These are referred to using two different abbreviations: CNY and CNH. But what is the exact difference when evaluating CNY vs CNH, and how do these distinct markets impact your corporate money transfers?

Read on to find out more about the mechanics of onshore and offshore Renminbi, their regulatory frameworks, and their trading rules. We will also share how Airwallex supports your business in achieving an agile global payments infrastructure without structural conversion bottlenecks.

CNY vs CNH: What’s the difference?

If you are exchanging Yuan online for a different currency, you may be confused by the fact that there are two different currency codes that both refer to Yuan. But there’s a clear distinction between the two types of Chinese Yuan:

What is CNY?

CNY stands for the Chinese Yuan Renminbi (RMB) and is the official currency used in mainland China.

What is CNH?

CNH stands for Chinese Yuan Renminbi Offshore and refers to the Chinese Yuan traded in the offshore market, mainly in financial hubs like Hong Kong.

The key differences between CNY vs CNH can be outlined as follows:

What is the difference when trading CNY and CNH?

When evaluating CNY vs CNH in international trade, the two types of Yuan maintain a direct 1:1 internal value. However, when you exchange them for a third currency like the Hong Kong Dollar, their values fluctuate independently due to these factors:

• Onshore controls: The Chinese government strictly regulates CNY, imposing tight restrictions on currency trading inside mainland China.

• Offshore freedom: Financial systems design CNH for international trading, allowing global businesses to buy and sell it freely on open markets.

• Conversion rules: While international companies can accept onshore allocations, using Yuan outside of China requires moving the capital through offshore accounts to convert it to CNH.

What does sending money in CNY to China mean for businesses?

When you’re sending money to China with a currency conversion, it is most likely you’ll be sending them CNY, but if you’re receiving money from China, it is more likely to be in CNH. There might be a slight difference in the exchange rate when sending and receiving Yuan for this reason.

There are also some restrictions and requirements that businesses should be aware of when sending money to China. The Chinese State Administration of Foreign Exchange requires certain information on transactions that involve sending CNY to China, to prove where the funds came from. Banks in China also require order information.

Tips when importing from China and paying in CNY

International money transfer services in CNY can help businesses avoid the risks associated with fluctuating exchange rates between their home currency and the Chinese Yuan. This can lead to more predictable costs and financial planning, especially for long-term contracts or recurring payments. Be aware that not all banks can facilitate CNY transactions, so working with financial institutions experienced in international trade with China is important.

If you’re looking to import goods from China and send payment in CNY, it will be beneficial to open a CNY-denominated bank account with a bank that offers international services. This facilitates receiving and sending payments in CNY. You can also look into fintech platforms that specialise in cross-border transactions to streamline payments and improve efficiency in handling CNY.

How can Airwallex help businesses send money to China?

With an Airwallex Business Account, you can set up a multi-currency business account in moments and start sending and receiving CNY straight away. You’ll access all the perks of a digital business account, plus market-beating exchange rates and multi-currency virtual payment cards. 

Airwallex offers integrations with your preferred accounting software such as Xero, Quickbooks and or Netsuite. This means that each of your CNY transactions are logged automatically to your CNY account, so you can keep track of your revenue and expenses wherever you go.

If your team has company expenses or travels frequently to China (or anywhere around the world), you can also issue multi-currency Visa Borderless Cards. This allows you to pay from already-held balances, eliminating the fees normally incurred with foreign currency exchanges.

Get started with Airwallex today to streamline your vendor payment process to Chinese suppliers and start expanding into the Chinese market. A product specialist can explain how an Airwallex Global Account can help you avoid the tedious conversion process between CNY and CNH. Get in touch today.

FAQs

What is the main difference between CNY and CNH?

The core distinction when comparing CNY vs CNH involves where the currency is traded and how it is supervised. 

• CNY operates onshore within mainland China under close supervision from the People's Bank of China, which restricts direct convertibility. 

• CNH operates as an offshore version traded across international hubs like Hong Kong, meaning its active value reacts directly to global market forces without strict state-mandated daily price bands.

Are RMB and CNY the same thing?

Yes, they both refer to Chinese currency, but they are used in different contexts.

• RMB is short for “Renminbi,” which translates to “the people’s currency” in English. It’s used to refer to the currency as a whole, as “sterling” is used to refer to British currency. It’s often used in formal and official contexts.

• CNY stands for “Chinese Yuan.” It is the ISO currency code used in financial and trading contexts to refer to the onshore version of the Chinese Yuan. It is typically used when referring to the currency in banking, financial transactions and when determining exchange rates. It is the equivalent of GBP (“Great British Pounds”) in British currency.