what’s difference of CNY and CNH

CNY and CNH are both currencies used in China, but they are different in a few important ways:

CNY stands for “Chinese Yuan Renminbi” and is the official currency of China, while CNH stands for “Chinese Yuan Offshore” and is a version of the Chinese Yuan that is traded outside of China.

CNY is subject to strict government regulations and is only allowed to be traded within China’s borders, while CNH is freely traded on foreign exchange markets.

CNH is typically used for international trade and investment transactions, while CNY is used for domestic transactions within China.

Because of the difference in trading restrictions and availability, CNH and CNY often have slightly different exchange rates. CNH is usually more expensive than CNY, reflecting the greater demand for it on the international market.

In summary, while both CNY and CNH represent the Chinese Yuan, they are used in different contexts and have different trading restrictions and exchange rates.

todd zhang continue Another significant difference between CNY and CNH is the way they are settled. Settlement refers to the process of exchanging one currency for another in a financial transaction. For CNY, settlement is done through the China National Advanced Payment System (CNAPS), which is a domestic payment system. On the other hand, CNH is settled through the Hong Kong Clearing House Automated Transfer System (CHATS), which is an offshore payment system.

The availability of CNY and CNH can also be affected by economic and political factors. For example, during periods of economic instability or political tension, it may be more difficult to trade or obtain one currency over the other.

Due to the different trading restrictions and settlement processes, CNY and CNH may have different liquidity levels. Liquidity refers to the ease with which a currency can be bought or sold in the market. In general, CNH tends to be more liquid than CNY due to its availability on the international market.

In summary, the differences between CNY and CNH are related to their availability, trading restrictions, settlement processes, exchange rates, and liquidity. While both currencies represent the Chinese Yuan, their distinct features make them suitable for different purposes and contexts.

todd zhang give me a sample Sure, here’s an example of how CNY and CNH can be used in different contexts:

Let’s say a Chinese company wants to import goods from the United States. The transaction will involve exchanging Chinese Yuan for US Dollars. The company can choose to pay for the transaction using either CNY or CNH, depending on their needs and preferences.

If the company has enough CNY in their domestic account, they can choose to settle the transaction using CNY. However, they will need to convert their CNY into US Dollars through a bank in China that is authorized to conduct foreign exchange transactions. This process may take longer and be subject to more regulatory restrictions.

Alternatively, the company can choose to settle the transaction using CNH, which can be freely traded on international markets. They can buy CNH with their CNY and then use the CNH to buy US Dollars. This process may be faster and more convenient, but the exchange rate for CNH may be different from the exchange rate for CNY, which means the company may need to pay a higher or lower amount depending on the exchange rate at the time of the transaction.

In summary, the choice between CNY and CNH depends on various factors such as availability, trading restrictions, settlement processes, exchange rates, and liquidity, and companies may choose to use one or the other based on their specific needs and circumstances.