Five pilot cities in east China’s Shandong province will gradually take the one yuan banknotes out of circulation and replace them with one yuan coins, according to a Shandong-based newspaper on March 10. The local newspaper cites the anti-government message on the one yuan paper money is one of the reasons for the replacement.
One yuan bill has been widely used for rebels in China to spread anti-government messages. Unlike the 100 yuan bill which is likely to be deposited into the bank directly, one yuan bill as the smallest amount of the banknote could be spread in the society for millions of times. These messages are either hand written or in fine print with the color very close to the original color of the money. Some use one yuan notes to criticize the nation’s leaders and the Communist Party, others especially the religious members write short sentences on the paper to define its beliefs and help ordinary Chinese “understand the truth of certain religion” that is banned in Mainland China since 1999.
According to the local newspaper in Shandong province, aside from eliminating illegal messages, coins have other advantages. Firstly, the circulation of coins is much longer than the banknote. Secondly, coins are conductive to the popularity of self-help machines in public places such as in the metro station and rail station, where some of the machines accept coins only. Additionally, coins can purify the environment of cash flow and reduce the spread the germs. A final point is that coins can protect the resources of water, wood and cotton that are needed to produce the paper money.
The small denomination currency is issued as coins in developed countries. However, in China, coins and banknotes are circulated at the same time with preferences in different regions. Listed on the official website of the state-owned China Banknote Printing and Minting Corporation, the biggest mints in the country are located in Yangtze River Delta Shanghai and Nanjing, and northeastern city Shenyang. That explains why one yuan coins are more popular in Yangtze River Delta. In addition, paper bills are more susceptible to damage in the humid and rainy southeast, as well as in the coastal Liaodong peninsula than they are inland.
Not everyone is enthusiastic about using coins. Yan Xuewen, an engineer who works in coin-using Shanghai thought coins are heavy and easy to lose. Other netizes post on micro blogging platform Weibo saying that it is more convenient to buy tickets with coins in the metro station. “From social perspectives, the level of public service development is the key factor that affects the quantity of the coins issued in the area. Coins are more widely used in the areas where subway stations and vending machines are more popular,” wrote one netizen.
Chen Hua, head of the fiscal and taxation financial institute at Shandong University of Finance and Economics believed that the replacement of one yuan bills with coins conforms to the current situation of domestic payment system as well as to the trend of international payment. Chen also mentioned that the moment would be promoted to other provinces and regions in the nation if the pilot project was well accepted by the citizens and the society.
Based on the previous experience of taking two yuan, one jiao (ten jiao equals to one yuan) and five jiao notes out of circulation, Chen said it is likely that the remove of one yuan banknotes will take a long transitional period during which the one yuan notes can still be normally used.
Jinan Branch of People’s Bank of China announced in January that it will stop issuing one yuan banknotes to commercial banks in five pilot cities in Shandong. Till now, the project has been implemented in succession in the pilot cities. Jinan Branch could not be reached for further clarification.
