In finance, the exchange rates (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies specifies how much one currency is worth in terms of the other. It is the value of a foreign nationís currency in terms of the home nationís currency.
In 1945, notes were introduced in denominations of 1, 5, 10, 50 and 100 yuan. 500 yuan notes were added in 1946, followed by 1000 and 2000 yuan in 1947 and 5000 and 10,000 yuan in 1948.
The economy of the People's Republic of China is the second largest in the world after that of the United States with a GDP of $7.8 trillion (2008) when measured on a purchasing power parity (PPP) basis. It is the third largest in the world after the US and Japan with a nominal GDP of US$4.3 trillion (2008) when measured in exchange-rate terms. China has been the fastest-growing major nation for the past quarter of a century with an average annual GDP growth rate above 10%. China's per capita income has grown at an average annual rate of more than 8% over the last three decades drastically reducing poverty, but this rapid growth has been accompanied by rising income inequalities. The country's per capita income is classified in the lower middle category by world standards, at about $3,180 (nominal, 104th of 178 countries/economies), and $5,943 (PPP, 97th of 178 countries/economies) in 2008, according to the IMF.
The customs gold unit (CGU) was a currency issued by the Central Bank of China between 1930 and 1948. In Chinese, the name of the currency was , literally "customs gold yuan" but the English name given on the back of the notes was "customs gold unit". It was divided into 100 cents. As the name suggests, this currency was initially used for customs payments, but in 1942 it was put into general circulation for use by the public at 20 times its face value in terms of the first Chinese yuan.
On 1 May 1930, the Central Bank of China put into circulation notes in denominations of 0.10, 0.20, 1, 5, and 10 customs gold units. These notes were printed by American Bank Note Company and dated 1930.
On 1 April 1942, Central Bank of China began to put into circulation its unissued stock of about CGU100 million in 1930-dated notes, including 20 and 50 denominations, not circulated previously.
In January 1947, Central Bank of China released notes of 250 and 500 customs gold units. Although dated 1930, these notes had been printed by American Bank Note Company in 1946. Inflation led to yet higher denominations: 1000, 2000, 5000 in December 1947, and 10,000, 25,000, 50,000, and 250,000 in July 1948, shortly before the currency reform of that year.
Several note types were produced by nine different printers, with slight differences in guilloche and size, but maintaining the same general design, with Dr. Sun Yat-sen on the face and the Shanghai Customs House on the back. The back of the notes bore the following English text preceding the denomination: "The Central Bank of China promises to pay the bearer on demand at its office here." Printers included the American Bank Note Company, Waterlow and Sons, the Security Banknote Company, the Chung Hua Book Company, Thomas De La Rue and the China Engraving and Printing Works.
Main articles: Chinese financial system, Banking in China, Private equity in China, Hedge fund industry in China, and China Venture Capital Association
Most of China's financial institutions are state owned and governed and 98% of banking assets are state owned. The chief instruments of financial and fiscal control are the People's Bank of China (PBC) and the Ministry of Finance, both under the authority of the State Council. The People's Bank of China replaced the Central Bank of China in 1950 and gradually took over private banks. It fulfills many of the functions of other central and commercial banks. It issues the currency, controls circulation, and plays an important role in disbursing budgetary expenditures. Additionally, it administers the accounts, payments, and receipts of government organizations and other bodies, which enables it to exert thorough supervision over their financial and general performances in consideration to the government's economic plans. The PBC is also responsible for international trade and other overseas transactions. Remittances by overseas Chinese are managed by the Bank of China (BOC), which has a number of branch offices in several countries.
Other financial institutions that are crucial, include the China Development Bank (CDB), which funds economic development and directs foreign investment; the Agricultural Bank of China (ABC), which provides for the agricultural sector; the China Construction Bank (CCB), which is responsible for capitalizing a portion of overall investment and for providing capital funds for certain industrial and construction enterprises; and the Industrial and Commercial Bank of China (ICBC), which conducts ordinary commercial transactions and acts as a savings bank for the public.
Shanghai Stock Exchange (SSE)
China's economic reforms greatly increased the economic role of the banking system. In theory any enterprises or individuals can go to the banks to obtain loans outside the state plan, in practice 75% of state bank loans go to State Owned Enterprises. (SOEs)  Even though nearly all investment capital was previously provided on a grant basis according to the state plan, policy has since the start of the reform shifted to a loan basis through the various state-directed financial institutions. Increasing amounts of funds are made available through the banks for economic and commercial purposes. Foreign sources of capital have also increased. China has received loans from the World Bank and several United Nations programs, as well as from countries (particularly Japan) and, to a lesser extent, commercial banks. Hong Kong has been a major conduit of this investment, as well as a source itself.