The yuan vs. renminbi distinction has got me upside down and turned around.
All along, some of us here at TOTN have been under the impression — nay, conviction — that the Chinese currency is the yuan. Lately, though, a new-to-us word has stormed our little economic scene: the tongue-twisting but fun-to-say renminbi. Say what? It's like someone told us dollars are out, shesellsseashells are in.
So what's the difference between the yuan and the renminbi? That's something I've been trying to figure out. Wikipedia's explanation was a bit over my head, but thankfully, Paul Krugman at the New York Times dug into this very question last year.
So: renminbi is the name of China’s currency; but yuan is the denomination of bills, the unit in which prices are measured, etc.. The closest parallel I can think of is Britain’s currency, which is sterling, but whose unit is the pound.
In the case of Britain, however, everyone is easy on talking about the pound’s value, the pound’s exchange rate, and so on; if you talk about sterling’s value, most non-Britons will have no idea what you’re talking about. But for whatever reason, using yuan in the same way draws disapproval.
But here’s the thing: talking about the number of renminbi per dollar is also, as I understand it, wrong — as wrong as talking about the number of sterling per dollar. Renminbi is the currency, but not a unit of the currency.
Ok, I'm still not sure I understand. Is it kind of like saying in the U.S. we have Money, but making that Money with a capital M, as a proper noun, not something we all have in common, and Money is made of dollars? So there's no way to say there's this amount of Money per dollar? I'm still very, very confused. And I'm not the only one.
The Times stylebook recommends … evasion — try to avoid using either term, and just talk about "Chinese currency."
Eh, right. Ok. So I'm going to ask someone much smarter than me about this, and try to get them to explain it to me in a way that penetrates this thick skull of mine. And if I can then explain it, I'll pass that along here.