Here’s a quick guide on the differences between CNY and CNH
Key takeaways
- CNY and CNH are two types of Renminbi that represent onshore and offshore versions of Yuan
- CNH is traded freely in the global currency markets; the Chinese government controls CNY
- When exchanging CNH for CNY or vice versa, the exchange rate is always 1:1
- Australian businesses can pay Chinese suppliers directly in CNH through a WorldFirst CNH local currency account, with same-day transfers to Chinese banks on supported routes
- WorldFirst also supports direct CNY payments to Chinese Alipay business and individual accounts through Pay CNY to China, bypassing payee annual conversion limits
- WorldFirst connects to 150,000+ Chinese suppliers through the network, with free and instant transfers between World Account holders
RMB, CNH, and CNY are all used when discussing China’s currency. Do they all mean the same thing?
Well, not exactly.
RMB is China’s official currency. CNY is the Chinese Yuan used in the onshore market and CNH is the Chinese Yuan used in the offshore markets.
Sounds confusing? It can be.
Take a look at our quick guide on CNY vs CNH, where we break down the main differences between the two. We also discuss how you can save costs when making payments into mainland China.
What is Renminbi (RMB) and Yuan?
Renminbi (RMB) means the people’s money. It is the official name of the currency issued by the People’s Bank of China in 1948.
The new currency allowed the government to unify the Chinese economy, which had previously been divided into different regional currencies.
Yuan is the unit of the Renminbi currency. It is similar to how Pound Sterling is the official currency of the UK, but the currency unit is referred to as Pound.
The symbol ¥ represents the Yuan.
CNY and CNH are two types of Renminbi that represent onshore and offshore versions of Yuan.
Since China’s capital and forex markets are controlled and not completely open, the Chinese Yuan has different features in the onshore and offshore markets. This is also why Yuan has two symbols distinguishing between onshore and offshore.
What is CNY currency?
CNY is the ISO code for the onshore Chinese Yuan, which differentiates it from the offshore Yuan. It is also sometimes referred to as the Chinese Yuan onshore or onshore Renminbi. All transactions in mainland China are done through CNY.
What is CNH currency?
CNH is the Chinese Yuan used in offshore markets outside of mainland China.
CNH was launched in 2010 when China’s Central Bank and Hong Kong Monetary Authority signed a clearing agreement on the Chinese Yuan. It is controlled by the free markets, which determine its value.
What are the differences between CNY and CNH currencies?
| CNY currency | CNH currency | |
| Trading location | Onshore – mainland China | Offshore – Outside of mainland China (Australia, Singapore, Hong Kong) |
| Controlled by | Government of China | Controlled by the free market |
| Primary use | Domestic transactions within mainland China | International transactions and investments |
| Exchange requirement | Foreign businesses need to exchange CNY for CNH for offshore use | No exchange is needed for offshore use |
| Currency trading | There are restrictions on currency trading | Can be traded with other currencies |
What is the exchange rate between CNY and CNH
When exchanging from CNH to CNY, the exchange rate is always the same – 1:1. They are worth the same amount.
However, when converting CNH or CNY to a foreign currency like AUD or HKD, the two types of Yuan can have different exchange rates. That’s because while CNY is controlled by the Chinese government, which restricts currency trading, CNH can be traded freely.
It’s important to note that foreign businesses can accept CNY, but if they want to use Yuan outside of China, they have to convert CNY into CNH first.
Why does China have two currencies?
Before China became the industrial and manufacturing leader of the world, its economy was considerably closed and the conversion of international currency was restricted. The Chinese government limited the money and wealth that could flow out of the country.
However, as the manufacturing industry boomed, more money started coming into the country, which led to the Chinese government establishing a new parallel currency.
CNY is controlled by the People’s Bank of China (PBOC) to maintain export competitiveness and economic stability. On the other hand, CNH is traded in the international market and its value is determined by market forces.
A two-currency system allows China to have a stable domestic currency while promoting international trade.
Benefits of trading in CNH
Here are some of the benefits of trading CNH for international businesses
Improves price transparency for Chinese suppliers
Because CNH can be traded like other international currencies, you can make international payments to suppliers in China using their home currency. Paying your Chinese suppliers in CNH also means they can provide a quote in their home currency without considering currency fluctuation. As a result, the quotation could be more favourable for you. You can avoid renegotiation of purchase prices and build more scope for price negotiations.
Suppliers won’t be required to add an exchange rate buffer within their price, which in turn gives you access to a larger pool of suppliers in China.
Manage currency risk through hedging
CNH can be traded as a deliverable forward currency. Purchasers who manage currency risk by hedging with FX forwards could benefit from better forward point gains with CNH when compared to equivalent USD transactions.
Make payments to China with WorldFirst
Paying Chinese suppliers from Australia has historically meant choosing between slow SWIFT wires with high FX markups and a limited set of supplier currencies. WorldFirst gives Australian businesses direct access to CNH and CNY payment routes into China from one multi-currency account.
WorldFirst supports CNH local currency accounts so you can hold, send and receive CNH funds. Direct payment routes with China’s top banks help you move money from Australia with same-day transfers on supported routes.
Features of the World Account for Australian businesses
- Local currency receiving accounts in 20+ currencies, including AUD, USD, GBP, EUR and CNH
- Send international payments in 100+ currencies across 200+ countries and regions
- Collect from 130+ marketplaces and payment gateways, including Amazon, Lazada, Etsy and Shopify
- Lock in future exchange rates with forward contracts (subject to eligibility)
- Xero and NetSuite integrations for automated reconciliation across currency balances
- Free and instant transfers between World Account holders
- Fully online account opening with no monthly fees
World Card for business expenses in China
The World Card is a Mastercard-powered multi-currency card linked to your World Account. Businesses can issue up to 20 World Cards at no additional cost and use them to pay suppliers on B2B marketplaces, settle Chinese platform fees, cover travel expenses in China, and manage ad spend on Chinese advertising platforms. There are no FX fees when paying in any of the 15 supported currencies, provided sufficient balance is held in the transaction currency.
How to pay CNY to China
The Pay CNY to China feature allows Australian buyers to send CNY (Chinese Yuan) payments directly to a supplier’s Alipay business or individual account in China, with WorldFirst processing the foreign exchange declarations required by Chinese regulators on your behalf.
These payments do not count against the payee’s annual foreign currency conversion quota. The daily limit is 1.5 million CNY per supplier, with the option to pay the same supplier another 1.5 million CNY on a subsequent day.
Benefits of Pay CNY to China:
- Pay like a local in CNY directly to Chinese suppliers without offline declarations or restrictions from the payee’s personal annual foreign exchange quota
- Fast and always-on with payments credit the payee’s Alipay wallet in near real-time
- Works for all trade use cases, from B2B wholesale to e-commerce sourcing
Step 1: Add a supplier
Collect your supplier’s company information:
- For businesses: Chinese company name and Unified Social Credit Code (from company certificates)
- For individuals: Chinese name and China mainland residence ID number
In the WorldFirst portal, go to Payments → Pay CNY to China → Add a supplier, enter the supplier type and provide the required details.
Step 2: Add payee details
The payee must be the supplier’s corporate bank account or the legal representative’s personal bank account. Payments to non-legal representatives are not supported. Add the Alipay business or personal account on the Payees page, ensuring the account owner name matches the supplier name you added.
Step 3: Get a CNY payment quota with an order
The CNY payment quota is the amount of CNY that can be exchanged based on your transaction activity with your Chinese supplier. Click Create a trade order, enter your contract information and submit. WorldFirst reviews orders within one business day. Once approved, the quota is available for CNY payments.
Step 4: Make the CNY payment
Click Pay CNY to China, select the Alipay business or personal account, choose the payee, enter the currency and amount, and verify with the 6-digit code sent to your phone.
Note: If your World Account has a balance in USD, EUR, GBP, JPY, SGD, NZD, AUD, CAD, HKD or CNH, you can make CNY payments directly.
If your balance is in CHF, SEK, AED, PLN, MXN, TRY, ZAR, SAR, ILS, CZK, THB or MYR, convert it to a G10 currency first, then make the CNY payment. Unfunded payments and batch payments are not supported through this flow.
Pay 1688 suppliers through World Pay
World Pay is the authorised international payment provider for 1688.com. Australian buyers can pay 1688 suppliers in CNH directly from the World Account without needing a Chinese bank account.
Step 1: Log in and select World Pay: From the Payments menu in your World Account dashboard, select World Pay and connect your 1688 account.
Step 2: Pay from your CNH balance. Ensure your World Account has sufficient CNH balance. If not, convert from another currency balance into CNH first.
Step 3: Checkout with World Pay: Choose World Pay as your payment method at 1688.com checkout. The payment settles in CNH directly to the supplier.
Disclaimer: The information contained is general only and largely our views. Before acting on the information you should consider whether it is appropriate for you, in light of your objectives, financial situation or needs. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions, estimates, mentioned products/services and referenced material constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. WorldFirst shall not be responsible for any losses or damages arising from your reliance of such information.
