Team Coin (硬币) vs. Team Notes (纸币): Why do some cities in China have a preference?

chinese currency 1 yuan
Photo Credit: @Jimmie on Flickr Creative Commons. Click here to view @Jimmie’s photography work.

 

I’ve decided to write a short piece this morning on a little issue that’s been bugging me and my fellow foreign dwellers in China: Money.

It’s not what you might think. Our curiosity here pertains to an incident that happened when a friend working in Xi’an in Shaanxi province came to visit me in Hefei, Anhui province. After buying a couple of drinks at a kiosk, the shopkeeper handed us our small change only for my friend to give a pained expression as if he had just been handed some wet denim jeans to wear: “Oh no! It’s all in coins!”

I was confused. Of course it was in coins. It was only 3元 (roughly 30p), and who wants the dreaded 1元 notes that get stuck in the change box on the bus and earn you a sigh from the bus driver?

This incident got us talking. As it turns out, in Xi’an 1元 coins were a rarity, and often considered difficult to get rid of, sometimes warranting disapproving looks if you were to hand them over to a cashier.

Flash forward a couple of months and I was visiting another friend in Beijing. I stopped off to buy some chewing gum only to be handed a leafy green handful of 1元 notes. I stuffed them into my purse staring ahead into an abyss desperately trying to scheme a plot to get rid of them before I returned to Hefei, where they might no doubt languish in my purse for the rest of the century.

The whole coin vs. notes drama has even peaked to the point of trying to secretly slip a 1元 note into a friend’s pocket or wallet in an effort to be free of them. Another method can be buying bottles of water or juice that are often priced at around 1-3元, although I did prompt an almost imperceptible noise of surprise from a lovely shop-owner by paying in notes.

It all sounds rather ridiculous and blown out of proportion. Which it is. But it does sometimes cause a minor inconvenience. Some public transports will only accept one form of the currency, and I’ve often been stopped short of quenching some serious summertime thirst because the vending machine doesn’t accept notes. But enough of these self-entitled first-world problems that often plague the ex pat community.

This all got me thinking: Why are some cities fans of coins and others not? And is there an economic or geographical reason for all of this?

As it turns out, there had been a relatively recent article on this topic by Joshua McMorrow-Hernandez for Coinweek.com, in which he lists some of the pros for coins being their durability (ever got your notes stuck in the zip of your purse?), while others prefer notes for being lightweight. According to his article, China is leaning towards a coin-based future, unlike other countries such as Canada who famously introduced a polymer plastic note to replace the metal.

Writer Doug Young also has a great informative piece for The Shanghai Daily on the battle between notes and coins. According to the article, in contrast to countries such as Canada and Australia, coins are seen as a more modern form of payment than the 1元 notes, with some cities in Shandong province already phasing out the bills. He also makes an excellent point that cash payment is already one step behind modern technology with the popularity of online payment service such as Alipay and WeChat Pay.

Finally, as most of the conversation seems to be centred on Shanghai, I found this question on Quora.com by someone who had been just as curious as myself. The answer claims that the coin-favouring is mainly attributed to Southern cities, which does tie in with Beijing and Xi’an being a playground for notes. However, the answer stops short at explaining this geographical divide.

*At this point I’ll mention that I’m hoping to do some further Chinese-language research into this. For now, I’ll leave my preliminary findings!*

So should we even devote that much time to this issue? Living in Hefei, I am thoroughly Team Coin, as it seems are many regional governments. However, the capital itself still won’t let go of the green notes, and if I ever lived in Beijing again, my allegiances could definitely change. Does China even need to phase out one over the other? Let me know what your thoughts/experiences are.

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2 Comments

  1. Thanks for bringing up this topic! The only time I can remember not being able to pay with coins was in Shangri-la (the rebranded city in Yunnan, not the hotel). I always thought it was because coins are really 麻煩 to carry up in the mountains, especially if you’re doing lots of smaller transactions.

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    1. You’re welcome! It’s something I’ve always thought about but I didn’t think to write a blog post until now. That’s interesting about Yunnan, it could definitely be a weight thing! I also read that coins make it difficult to cash-up at the end of the day as they can’t go through the note-counting machines.

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