RMB vs CNY vs CNH: China’s Currency Codes Explained for Foreign Companies

If you have spent any time reading a Chinese contract, invoice, or bank statement, you have probably seen three different codes — RMB, CNY, and CNH — and wondered whether they mean the same thing. They do not. RMB, or renminbi, is the name of China’s currency, while CNY and CNH are two different exchange-rate conventions for the same money, split between an onshore market managed by the People’s Bank of China and an offshore market that floats freely. Getting the distinction right matters for foreign companies in Guangzhou, Shenzhen, Foshan, and Dongguan, because it affects how you quote prices, issue invoices, sign contracts, and move money across the border. This guide explains the difference in plain English.

What Each Term Means

RMB is short for renminbi, which literally means “the people’s currency.” It is the official name of the money itself, in the same way that “pound sterling” is the name of the United Kingdom’s currency. When people talk about the renminbi in general terms — or about China’s currency policy as a whole — they are talking about RMB.

CNY and CNH, by contrast, are trading codes. CNY is the ISO 4217 code for the onshore renminbi, the currency as it is traded inside mainland China, where the People’s Bank of China manages its value within a daily trading band. CNH is the code for the offshore renminbi, the version of the currency that circulates outside the mainland, primarily in Hong Kong, where its price is set freely by international supply and demand. Both are the same currency in name, but they trade in two different markets with two different prices.

Why China Has Two Renminbi Markets

The split between CNY and CNH exists because China still maintains capital controls. Inside the mainland, the renminbi is not freely convertible: the central bank sets a daily reference rate, and the onshore rate may move only within a narrow band around it. Outside the mainland, however, the renminbi is much freer, and the offshore CNH rate is determined by the market without the same band.

The practical result is that CNY and CNH are usually very close, but not identical. In calm conditions the gap between them is a fraction of a percentage point; in periods of stress, when international investors want to move money out of renminbi, the offshore rate can diverge further. A foreign company that treats the two rates as interchangeable can quietly misprice a transaction, which is why the distinction belongs in your finance team’s vocabulary.

Which Code to Use Where

The rule of thumb is simple: anything that happens inside mainland China uses CNY, and anything that happens in the offshore market uses CNH. A price list for customers in Guangzhou is denominated in CNY. A trade settled through a Hong Kong bank account in renminbi is CNH. When a contract only needs to name the currency itself without reference to a market, RMB is the safe general term.

Invoices, Taxes, and Bank Accounts

Inside China, everything runs on onshore renminbi. Your fapiao, or official tax invoice, is always issued in CNY, your VAT and corporate income tax are calculated and paid in CNY, and your mainland bank accounts — whether basic, general, or capital accounts — are denominated in CNY. There is no situation in which a company registered in Shenzhen or Foshan would legally issue a domestic invoice in CNH.

This is also why the type of bank account you hold matters. Our guide to China corporate bank account types explains how basic, general, capital, and foreign currency accounts fit together, and our article on how to open a corporate bank account in China covers the practical steps for foreign companies.

Currency and Profit Repatriation

The onshore-offshore split becomes most visible when a company wants to send money out of China. Dividends, royalties, and service fees are paid in onshore CNY from the mainland entity, converted into foreign currency at the prevailing rate, and remitted through a bank after the relevant filings with the State Administration of Foreign Exchange. The whole process happens on the onshore side of the market, which means the rate you actually receive is the CNY rate, not the CNH rate.

For a step-by-step explanation of how this works, see our guide to profit repatriation from China and our introduction to SAFE foreign exchange registration. Understanding which market you are in helps you avoid quoting an offshore rate for an onshore transaction — a small error that can nonetheless cause confusion with your bank and your head office.

Common Mistakes to Avoid

The most frequent mistake foreign companies make is treating RMB, CNY, and CNH as interchangeable labels. A second is quoting an offshore CNH rate for a domestic transaction, or assuming the mainland entity can freely convert and move renminbi at the offshore price. A third is signing a contract that simply says “RMB” without specifying the settlement location and rate convention, which can create ambiguity if the two markets ever diverge significantly.

None of these errors is difficult to avoid once the terminology is clear. Name the currency as RMB in general terms, use CNY for everything onshore, use CNH only for offshore settlement and hedging, and keep your invoicing, banking, and remittance paperwork consistent with the market they actually belong to.

How Dan Young Can Help

Currency conventions are only one part of running a compliant cross-border operation, but they touch everything from your invoices to your tax filings to your dividend remittances. Dan Young Business Consultancy helps foreign companies in Guangzhou, Shenzhen, Foshan, and Dongguan with the full finance function, including bookkeeping, audit, and tax compliance, foreign exchange procedures, and profit repatriation. If you would like help getting your currency, banking, and tax paperwork consistent, contact us and we will be glad to advise.