What is the difference between CNH and CNY?
Understanding how the Chinese currency works across onshore and offshore markets
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China plays a central role in global trade. It is a key market for many international businesses.
However, two versions of the Chinese currency exist: CNH and CNY.
Understanding how they work is vital, as they directly influence how payments are processed, the outcome of pricing negotiations and the structure of commercial relationships.
Having access to both helps avoid operational confusion and makes it easier to work with a wider range of suppliers and customers.
How CNH and CNY work in onshore and offshore markets
Transactions with China can involve two versions of the yuan: CNH and CNY.
The currency is formally called renminbi (RMB), while the yuan refers to its unit. In practice, however, it is commonly referred to as the yuan in everyday business.
While CNH and CNY refer to the same currency, they operate in different environments. CNY is used within China and managed under specific regulatory conditions, while CNH (with the “H” referring to Hong Kong) developed as an offshore version of the renminbi to support international trade, initially through Hong Kong, and is now more freely traded outside China.
Funds can generally be transferred between CNH and CNY at close to a one-to-one level, although the exact rate may vary slightly.
CNH and CNY have different exchange rates
Because CNH and CNY are traded in separate markets, their exchange rates against other currencies can differ.
The onshore rate (CNY) is influenced by domestic policy and capital controls.
The offshore rate (CNH), on the other hand, reflects by global supply and demand.
In stable conditions, the difference between the two exchange rates is often limited. However, during periods of market tension or uncertainty, the gap can become more noticeable.
For companies, this means that the cost of a transaction may vary depending on whether it is executed in the onshore or offshore market, and whether the payment is made locally or through international transfers involving additional conversions.
China is increasing the global use of the yuan
In international trade with China, the US dollar has traditionally been the main currency used for cross-border transactions. However, this is gradually changing.
Over the past years, China has been promoting the use of the yuan in international trade and cross-border payments to reduce its dependence on the US dollar.
Today, a growing share of China’s international trade is already conducted in yuan, and this trend is likely to continue as more partners adopt it in cross-border transactions.
Access to the CNH and CNY is a game-changer for businesses
If you are importing from China, access to both CNH and CNY can have a direct impact on the trading relationship. Using both versions of the yuan allows you to pay suppliers in their local currency, which can secure better terms and expand your choice of partners.
Some suppliers operate only in the onshore market and cannot accept offshore yuan (CNH). In this case, access to CNY is essential to work together and align with local practices.
It also limits the likelihood of multiple currency conversions, for example, converting from CHF to USD and then from USD to CNH or CNY. This reduces costs and makes it easier to understand the final price.
If you are exporting to China, accepting payments in yuan can make your offer more competitive and easier for local customers to work with.
Limited access to CNH and CNY could become a hinderance
Many companies find that their payment infrastructure is not aligned with local practices in China.
Not all banks and financial providers support both CNH and CNY. In fact, many don’t support the yuan at all. In this situation, companies have to pay in intermediary currencies, such as US dollars.
This can restrict how companies interact with suppliers and customers in China. As a result, businesses become reliant on intermediaries, accept less favourable terms or use double conversions.
Over time, this increases costs and complicates operations, especially with growing exposure to China.
How SwissFx supports companies trading with China
SwissFx provides access to both CNH and CNY within a single platform, allowing businesses to manage payments without without the need for multiple intermediaries.
Businesses can pay suppliers in CNH and hold and manage funds in CNY through a local account.
This allows them to use the appropriate currency for each situation, without unnecessary conversions, and become better aligned with the practices of their local partners.
It leads to reduced costs, simpler processes, and smoother transactions. Your business is able to adapt, which builds trust in commercial relationships.