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What Is The Chinese Yuan? Step-by-Step Guide For Trading Yuan

Parshwa Turakhiya
Written by:
Parshwa Turakhiya
Chinmay Soni
Reviewed by:
Chinmay Soni
Mirjan Hipolito
Fact-checked by:
Mirjan Hipolito
Updated:
June 12, 2026

Editorial Note: While we adhere to strict Editorial Integrity, this post may contain references to products from our partners. Here's an explanation for How We Make Money. None of the data and information on this webpage constitutes investment advice according to our Disclaimer.

Yuan is China's official currency, divided into 10 jiao and further into 10 fen. It is a fiat currency, meaning it is not backed by any physical commodity. The onshore yuan is used in mainland China and regulated by the People's Bank of China (PBOC), while the offshore yuan is used outside mainland China and is not regulated by the PBOC. You can trade Yuang at the current market rate through a Forex broker, by ETFs/ETNs, Futures.

The Yuan (¥) is the official currency of the People's Republic of China and plays a vital role in the global economy. Managed by the People's Bank of China, the Yuan is abbreviated as CNY for the Onshore Yuan and CNH for the Offshore Yuan, each with distinct characteristics. This article explores what the Yuan is, the differences between its types, and how to trade it. 

What is Yuan?

The Yuan, symbolized by ¥, comes in two types:

  1. Onshore Yuan (CNY): This is used within mainland China and follows the rules set by the People's Bank of China. It's mainly for domestic transactions.

  2. Offshore Yuan (CNH): This is used outside of China for international trade. It offers more flexibility and is influenced by global market dynamics.

Investing in the Yuan offers many benefits due to China's strong and growing economy. As the world's second-largest economy, China's influence is increasing. In 2022, the IMF reported that the Yuan made up 2.7% of global foreign exchange reserves, up from 1.1% in 2010.

Note:

all official statistics of China and the official exchange rate of the Chinese currency against the dollar implies calculation only in CNY.

Dynamics of the difference between CNH and CNYDynamics of the difference between CNH and CNY

The Yuan's value fluctuates based on global and Chinese economic conditions and policies. China's steady economic growth makes the Yuan attractive to foreign investors. However, it's important to remember that the Chinese government actively manages the Yuan's value to maintain a favorable exchange rate for exports. This can affect the Yuan's price movements, which investors need to consider.

CNY/USD weekly chart, data from InterContinental ExchangeCNY/USD weekly chart, data from InterContinental Exchange

Step-by-step guide for trading Yuan

  1. Learn the basics

    • Understand the Yuan: Learn the difference between Onshore Yuan (CNY) and Offshore Yuan (CNH).

    • Market knowledge: Get familiar with how Forex markets work and the factors that influence the Yuan's value, such as Chinese and global economic conditions.

  2. Choose a trading method

    • Spot Forex trading: Buy and sell Yuan at the current market rate through a Forex broker.

    • Futures: Trade contracts to buy or sell Yuan at a predetermined price in the future.

    • ETFs/ETNs: Invest in funds or notes that track Yuan-denominated assets.

  3. Select a broker

We suggest you familiarize yourself with the comparison table with brokers offering the most convenient conditions for traders. Here you can start trading Yuan: 

The main trading conditions of brokers
Currency pairs ETFs Futures Demo Min. deposit, $ Max. leverage Accept traders from China Open account

IUX

34 No No Yes 50 1:3000 Yes Go to broker
Your capital is at risk.

XM

57 No No Yes 5 1:1000 Yes Go to broker
Your capital is at risk.

Pepperstone

90 Yes No Yes No 1:500 Yes Go to broker
Your capital is at risk.

LHFX

41 No Yes Yes 10 1:500 Yes Go to broker
Your capital is at risk.

Fusion Markets

90 No No Yes 1 1:500 Yes Go to broker
Your capital is at risk.

  1. Open an account

    • Fill out the registration form, confirm your personal information

  2. Fund your account

    • Transfer money into your trading account using your preferred method (bank transfer, credit card, etc.).

  3. Analyze the market

  4. Place your trades

    • Spot Forex trading: Use the broker’s trading platform to execute buy or sell orders for Yuan.

    • Futures trading: Buy or sell Yuan futures contracts through the broker’s platform.

    • ETFs/ETNs: Trade Yuan ETFs or ETNs via the brokerage firm's platform.

  5. Monitor your trades

    • Track performance: Keep an eye on your trades and adjust your strategy as needed.

    • Stay informed: Follow economic news and updates that can impact the Yuan.

  6. Manage risks

    • Stop-loss orders: Set stop-loss orders to limit potential losses.

    • Diversify: Don’t put all your funds into a single trade or asset.

  7. Close your trades

    • Profit taking: Close your positions when you reach your profit targets.

    • Loss mitigation: Exit trades if they move against you beyond your risk tolerance.

  8. Review and improve

    • Evaluate: Analyze your trades to understand what worked and what didn’t.

    • Adjust: Refine your trading strategy based on your performance and insights.

Start with a demo account to practice trading the Yuan

Andrey Mastykin
Andrey Mastykin Head of Company Reviews and Ratings

Trading the Yuan in the Forex market is uniquely challenging and rewarding. The key is understanding the difference between Onshore Yuan (CNY), regulated by the Chinese government, and Offshore Yuan (CNH), which trades more freely.

In my experience, staying alert to the Chinese government’s interventions is crucial, as these can cause sudden price changes. Using economic calendars and news alerts focused on China helps anticipate these movements.

One of my notable trades occurred during heightened US-China trade tensions. By closely monitoring news and market sentiment, I successfully predicted a Yuan devaluation. This experience underscored the importance of using stop-loss orders to manage risk.

For beginners, I recommend starting with a demo account to practice and then transitioning to small positions on a live account.

Summary

Key steps to trading the Yuan include selecting a trading method (spot Forex, futures, ETFs/ETNs), choosing the right broker, opening and funding an account, and staying informed about China's economic policies and global market trends. Effective strategies combine technical and fundamental analysis, with close monitoring of China's economic indicators and policy changes.

Risk management is essential due to potential volatility from government interventions. Beginners should start with demo accounts and progress to live trading with small positions. Successful trading of the Yuan requires continuous education and adaptability to new information.

FAQs

How is yuan used in trade?

The yuan is extensively used in international trade, offering a direct transaction avenue for companies importing goods and services from China. It's employed for payments, with the flexibility for international contracts to be denominated in yuan. This allows specifying that payments will be executed in the Chinese currency. Additionally, the yuan serves a crucial role in hedging against currency risk, providing companies exposed to fluctuations a means to protect themselves from yuan depreciation.

How to invest money in yuan?

Investing in yuan provides diverse avenues. One can start by opening a Forex account with a yuan-specialized broker for direct buying and selling transactions. Alternatively, investors can opt for yuan-denominated securities like bonds or stocks, offering exposure without acquiring the currency. Another option involves investing in a yuan-denominated ETF, providing diversified exposure to yuan-denominated assets.

What is the future of the yuan?

The yuan's use in global trade has increased significantly in recent years. In 2022, the yuan accounted for 20% of global trade payments, up from 10% in 2010. Further, the Chinese yuan (CNY) is anticipated to become the third-most-used currency in international payments by 2030, potentially surpassing the British pound and Japanese yen. The yuan could one day replace the US dollar as the world's reserve currency.

Why does China have 2 currencies?

China strategically maintains two currencies to regulate capital flow. The onshore yuan (CNY) is used exclusively for transactions within mainland China. In contrast, the offshore yuan (CNH) serves transactions outside mainland China. This dual-currency system enables the People's Bank of China (PBOC) to control the onshore yuan by setting its exchange rate and managing capital flow without direct intervention in the offshore yuan market.

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Team that worked on the article

Parshwa Turakhiya
Parshwa Turakhiya
Editorial Standards Specialist

Parshwa is a content expert and finance professional possessing deep knowledge of stock and options trading, technical and fundamental analysis, and equity research. As a Chartered Accountant Finalist, Parshwa also has expertise in Forex, crypto trading, and personal taxation.

Learn about our editorial policies
Chinmay Soni
Chinmay Soni
Head of Fact-Checking Department

Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data.

Mirjan Hipolito
Mirjan Hipolito
Cryptocurrency and stock expert

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets.

Glossary for novice traders
Volatility

Volatility refers to the degree of variation or fluctuation in the price or value of a financial asset, such as stocks, bonds, or cryptocurrencies, over a period of time. Higher volatility indicates that an asset's price is experiencing more significant and rapid price swings, while lower volatility suggests relatively stable and gradual price movements.

Options trading

Options trading is a financial derivative strategy that involves the buying and selling of options contracts, which give traders the right (but not the obligation) to buy or sell an underlying asset at a specified price, known as the strike price, before or on a predetermined expiration date. There are two main types of options: call options, which allow the holder to buy the underlying asset, and put options, which allow the holder to sell the underlying asset.

CFD

CFD is a contract between an investor/trader and seller that demonstrates that the trader will need to pay the price difference between the current value of the asset and its value at the time of contract to the seller.

Risk Management

Risk management is a risk management model that involves controlling potential losses while maximizing profits. The main risk management tools are stop loss, take profit, calculation of position volume taking into account leverage and pip value.

Mitigation

The idea behind mitigation is to recognize and effectively trade mitigation blocks. These blocks consist of specific price action patterns that signal a change in market sentiment or demand-supply dynamics.

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