Aug 31, 2023
4 mins read

Understanding CNH vs CNY in Chinese RMB

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Key Takeaways:

  • CNY and CNH represent different forms of the Chinese Renminbi (RMB)
  • CNY is the onshore currency used within mainland China, while CNH is the offshore counterpart primarily traded outside mainland China
  • CNY has more restrictions on convertibility due to the Chinese government's control over its value and movement

The Chinese Renminbi (RMB) plays a pivotal role in the global economy, and two of its commonly discussed forms are the offshore Chinese Yuan (CNH) and the onshore Chinese Yuan (CNY). In this article, we will navigate the nature of CNH and CNY, shedding light on their meanings, uses, and the factors that influence their values. Whether you're a finance enthusiast, a global businessperson, or simply curious about the mechanics of the world's second-largest economy, this exploration will provide valuable insights into understanding CNH versus CNY in the realm of Chinese RMB.

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What are CNY and CNH?

CNY - The onshore rate being used in mainland china, only can be accessed even with PBOC designated clearing banks appointed by PBOC
CNH - The offshore rate being traded globally, can be accessed even without PBOC designated clearing banks

CNY, or the Chinese Yuan - represents the onshore currency unit in mainland China. At the same time, CNH, or the Chinese Yuan Offshore - refers to the offshore counterpart primarily traded outside mainland China in locations such as Hong Kong. CNY and CNH are equivalent to one unit of Renminbi (RMB), China's official currency. Renminbi (RMB) translates as "people's currency" and represents the legal tender used across mainland China. However, when it comes to international transactions, CNH is often utilized due to its flexibility in being traded on offshore markets. CNH allows foreign investors greater access and more straightforward transactions with the Chinese economy, contributing significantly to China's international trade and financial activities.

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The Rate of CNY and CNH

The table below highlights the daily exchange rate for the CNH and CNY against the US Dollar and between the two currencies over a five-day period in August 2023. While the exchange rates for CNH and CNY are pretty close, there are slight differences. These differences can be attributed to various factors, including market demand, capital flows, economic indicators, geopolitical events, and central bank policies.


CNH Rate to USD 

CNY Rate to USD 

 CNH Rate To CNY 





















The differences between CNY And CNH

 While both CNY and CNH refer to the Chinese yuan, they do have key differences, which include:




Location of Usage
  • Is used within mainland China
  • Is used in offshore financial centers, primarily Hong Kong, and is available for international trade and investment
  • More restrictions on its convertibility due to the Chinese government's control over its value and movement.
  • Relatively more convertible, as it is traded internationally and subject to market forces.
Exchange Rate Management:
  • The Chinese government tightly manages the value of CNY
  • The value of CNH is influenced by market demand and supply, often leading to some differences between its exchange rate and that of CNY
Market Factors
  • Domestic economic and monetary policies primarily influence CNY
  • Global market factors influence CNH, as it is used in international trade and investment
Usage for International Trade
  • Is used for trade within mainland China
  • Is used for international trade transactions, especially in regions where CNY is not easily accessible

In conclusion, understanding the difference between CNH and CNY in the Chinese RMB is crucial for anyone dealing with China's currency. While CNH and CNY represent the Chinese renminbi, their trading mechanisms and geographical restrictions differ. CNH, "Chinese Offshore Non-deliverable," is a freely tradable currency primarily used outside China, allowing businesses and individuals to conduct transactions in offshore financial centers. On the other hand, CNY, known as "Chinese Onshore Deliverable," is used within mainland China and is subject to stricter capital controls. Gaining a comprehensive understanding of these distinctions empowers businesses and investors to navigate the complexities of China's financial landscape effectively.


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