10 Yuan – People's Republic of China

In 1989, the People's Republic of China was grappling with significant economic challenges that directly impacted its currency, the Renminbi (RMB). The period followed a decade of reform and opening-up, which had spurred growth but also led to high inflation, estimated at over 18% in 1988. This inflationary pressure, driven by rapid credit expansion and price liberalization, severely eroded the currency's purchasing power and public confidence. The government's attempt to cool the overheated economy through austerity measures contributed to widespread public discontent, which was one factor among many in the social tensions of that spring.

The currency's exchange rate was managed under a dual-track system. The official rate, set by the state, was artificially strong, while a more market-driven swap centre rate existed for trade transactions. This created distortions, encouraging arbitrage and leading to a depletion of foreign exchange reserves as China struggled to maintain the official peg. The economic instability and the political events of 1989 resulted in international sanctions and a sharp decline in foreign investment, further straining the country's foreign exchange position and putting downward pressure on the currency's value in external markets.

In response to these crises, the Chinese government undertook a decisive economic retrenchment in late 1989 and the early 1990s. Financial discipline was reasserted, and reforms were cautiously continued. A pivotal step came in 1990 with the establishment of the Shanghai Foreign Exchange Adjustment Centre, a move towards unifying the exchange rate mechanisms. These stabilization efforts, part of a broader recovery strategy, laid the groundwork for the more radical unification and devaluation of the RMB in 1994, which marked a turning point in China's modern economic integration.