Editing Renminbi (section)

===Transition to an equilibrium exchange rate===
{{Unreferenced section|date=November 2024}}
China's transition by the mid-1990s to a system in which the value of its currency was determined by supply and demand in a [[foreign exchange market]] was a gradual process spanning 15 years that involved changes in the official exchange rate, the use of a [[dual exchange rate]] system, and the introduction and gradual expansion of markets for foreign exchange.<ref>{{Cite web |last=Hu |first=Xiaolian |date=2010-07-15 |title=A Managed Floating Exchange Rate Regime is an Established Policy |url=http://www.pbc.gov.cn/english/130724/2881712/index.html |access-date=2025-04-19 |website=The People's Bank of China}}</ref>

The most important move to a market-oriented exchange rate was an easing of controls on trade and other current account transactions, as occurred in several very early steps. In 1979, the [[State Council of the People's Republic of China|State Council]] approved a system allowing exporters and their provincial and local government owners to retain a share of their foreign exchange earnings, referred to as foreign exchange quotas. At the same time, the government introduced measures to allow retention of part of the foreign exchange earnings from non-trade sources, such as overseas remittances, port fees paid by foreign vessels, and tourism.<ref>{{Cite web |title=Pan Gongsheng: China's Foreign Exchange Administration Reform over the Past Seven Decades |url=https://www.safe.gov.cn/en/2019/0930/1574.html |access-date=2025-04-19 |website=State Administration of Foreign Exchange}}</ref>

As early as October 1980, exporting firms that retained foreign exchange above their own import needs were allowed to sell the excess through the state agency responsible for the management of China's exchange controls and its foreign exchange reserves, the State Administration of Exchange Control. Beginning in the mid-1980s, the government sanctioned foreign exchange markets, known as swap centres, eventually in most large cities.{{cn|date=November 2024}}

The government also gradually allowed market forces to take the dominant role by introducing an "internal settlement rate" of ¥2.8 to 1 US dollar which was a devaluation of almost 100%.<ref>{{Cite web |date=1983-03-09 |title=Report and Recommendation of the President of the International Bank for Reconstruction and Development to the Executive Directors on a Proposed Loan in an Amount Equivalent to $100.8 Million to the People's Republic of China for the Zhongyuan-Wenliu Petroleum Project |url=https://documents1.worldbank.org/curated/en/258511468243257917/pdf/multi-page.pdf |access-date=2025-04-19 |website=The World Bank}}</ref>