China to issue new 100 yuan note to counter the counterfeits

The People’s Bank of China is planning to issue a new 100 yuan banknote with improved anti-counterfeiting features in November, the first upgrade of the bill since 2005.

While the portrait of Mao Zedong will remain, the new notes will include features to combat counterfeiting, which is rampant.

The face value of seized counterfeit money on the mainland rose from 329 million yuan (HK$410.million) in 2012 to 532 million yuan last year.

The central bank said on Monday the note’s design had been updated so it could be more easily identified by vending machines and automatic teller machines, which have proliferated across the country.

IN PICTURES: How China's renminbi banknote has changed over the decades

The currency has undergone many redesigns since the newly founded PBOC issued its first series on December 1, 1948 during China's civil war.

The new note will be the third edition of the fifth series, which was introduced in 1999. The second edition was issued in 2005.

Its look will stay largely the same as the second edition except for changes to the colour and design of some graphic elements.

Colour-changing ink will be applied to the pattern of the number 100 in the centre of the note to make it more difficult to counterfeit. The colour will change from golden to green when the angle is adjusted.

New notes will feature additional serial numbers on the right-hand side to ensure they are still identifiable even if the serial number on the left has worn off.

Other new features include a security line on the right of the bill, which will change from hot pink to green when the viewing angle is adjusted, and a textured pattern across the image of the Great Hall of the People on the back of the note.

Commenting on the change, Guangzhou-based marketing executive Mars Ma said he would be more interested in seeing the issue of higher-value notes – the 100 yuan note is presently the highest denomination of the currency.

“I don’t care much about the update as it looks similar to the old ones,” he said.

“In light of soaring inflation, I’m more interested in seeing banknotes in larger denominations, say 500 yuan, so I don’t have to walk around with a thick wad of 100 yuan bills that can’t fit into a man’s wallet.”

Forged 100 yuan notes are often initially sold for as little as 6.yuan, becoming more expensive each time they change hands.

Guangdong police investigate about 1,000 cases of counterfeit banknotes a year. More than 90 per cent of these are printed in the east of the province.

In one case in eastern Guangdong last year, suspects printed a tonne of counterfeit 100 yuan notes in less than a week.

Members of such syndicates pocket huge profits, and pay their manual workers up to 10,000 yuan a day.

Beijing-based economist Hu Xingdou  said the updated design of the note could help boost the confidence of overseas users but the currency still needed urgent reform.

“The fundamental approach of boosting users’ confidence in yuan banknotes is to ensure a stable value,” Hu said. But he added: “The government needs to stop printing more banknotes as an approach to stimulating the economy and reform its entire note-issuing mechanism or it faces a depreciation crisis.”