The People?s Republic of China, located in eastern Asia, has an area of 3,696,100 sq. mi. (9,572,900 sq. km.) including Manchuria and Tibet, and a population of 1.14 billion. Capital: Beijing (Peking). The economy is based on agriculture, mining and manufacturing. Textiles, clothing, metal ores, tea and rice are exported. ,In the fall of 1911, the middle business class of China and Chinese students educated in Western universities started a general uprising against the Manchu dynasty which forced the abdication on Feb. 12, 1912, of the boy emperor Hsuan T?ung (Pu-yi), thus bringing to an end the Manchu Dynasty that had ruled China since 1644. Five years later, China formally became a republic with physician and revolutionist Dr. Sun Yat-sen as the first provisional president.,, ,Dr. Sun and his supporters founded a new party called the Kuomintang, and planned a Chinese republic based upon the Three Principles of Nationalism, Democracy and People?s Livelihood. They failed, however, to win control over all of China, and Dr. Sun resigned the presidency in favor of Yuan Shih Kai, the most powerful of the Chinese army generals. Yuan ignored the constitution of the New Republic and tried to make himself an emperor.,, ,After Yuan?s death in 1917, Dr. Sun Yat-sen and the Kuomintang established a republic in Canton. It also failed to achieve the unification of China, and in 1923 Dr. Sun entered into an agreement with the Soviet Union known as the Canton-Moscow Entente. The Kuomintang agreed to admit Chinese communist to the party. The Soviet Union agreed to furnish military advisers to train the army of the Canton Republic. Dr. Sun died in 1925 and succeeded by one of his supporters, General Chiang Kai-shek.,, ,Chiang Kai-shek launched a vigorous campaign to educate the Chinese and modernize their industries and agriculture. Under his command, the armies of the Kuomintang captured Nanking (1927) and Peking (1928). In 1928, Chiang was made president of the Chinese Republic. His government was recognized by most great powers. But he soon began to exercise dictatorial powers. Prodded by the conservative members of the Kuomintang, he initiated a break between these members and the Chinese Communists which, once again, prevented the unification of China,, ,Persuaded that China would fare better under the leadership of its businessmen alliance with the capitalist countries than under the guidance of the Chinese Communists in alliance with the Soviet Union, Chiang expelled all Communists from Kuomintang, sent the Russian advisers home, and hired German generals to train his army.,, ,The Communists responded by setting up a government and raising an army that during the period of 1930-34 acquired control over large parts of Kiangsi, Fukien, Hunan, Hupeh and other provinces. These early Communists centers issued local currency in the form of some copper and silver coins and many varieties of notes printed mostly on pap0er and a few issues on cloth. A lack of minting facilities limited the issue of coins. Low mintage and the demonetization of silver in China in 1935 have elevated the surviving coinage specimens to the status of highly valued numismatic rarities. The issues of notes, the majority of which bore revolutionary slogans and often cartoon-like vignettes have also suffered a high attrition rate and certain issues command appreciable premiums in today?s market.,, ,When his army was sufficiently trained and equipped, Chiang Kai-shek led several military expeditions against the Communist Chinese which, while unable to subdue them, dislodged them south of the Yangtze, forcing them to undertake in 1935 a celebrated ?Long March? of 6,000 miles (9,654 km.) from Hunan northwest to a refuge in Shensi providence just south if Inner Mongolia from which Chiang was unable to displace them. ,The Japanese menace had now assumed warlike proportions. Chiang rejected a Japanese offer of cooperation against the Communists, but agreed to suppress the movement himself. His generals, however, persuaded him to negotiate a truce with the Communists to permit united action against the greater menace of Japanese aggression. Under the terms of the truce, Communists were again admitted to the Kuomintang. They, in turn, promised to dissolve the Soviet Republic of China and to cease issuing their own currency. ,The war with Japan all but extinguished the appeal of the Kuomintang, appreciable increased the power of the Communists, and divided China into three parts. The east coast and its principal cities ? Peking, Tientsin, Nanking, Shanghai and Canton ? were in Japanese-controlled, puppet-ruled states. The Communists controlled the countryside in the north where they were the de facto rulers of 100 million peasants. Chiang and Kuomintang were driven toward the west, from where they returned with their prestige seriously damaged by their wartime performance. ,At the end of World War II, the United States tried to bring the Chinese factions together in a coalition government. American mediation failed, and within weeks the civil war resumed. ,By the fall of 1947, most of northeast China was under Communist control. During the following year, the war, turned wholly in favor of the Communists. The Kuomintang armies in the northeast surrendered, two provincial capitals in the north were captured, a large Kuomintang army in the Huai river basin surrendered. Four Communist armies converged upon the demoralized Kuomintang forces. The Communists crossed the Yangtze in April 1949. Nanking, the Nationalists capital, fell. The civil war on the mainland was virtually over. ,Chiang Kai-shek relinquished the presidency to Li Tseng-jen, his deputy, and after moving to Canton, to Chungking and Chengtu, retreated from the mainland to Taiwan (Formosa) where he resumed the presidency. ,The Communists Peoples Republic of China was proclaimed on September 21, 1949. Thereafter relations between the Peoples Republic and the Soviet Union steadily deteriorated. China emerged as an independent center of Communist power in 1958. ,During and following World War II, the Chinese Communists again established banks at the various Communist centers to issue local currency. Prominent among Communist regional banks were the Bank of Central China, Bank of Peihai, and Bank of Shansi, Chahar and Hopeh. ,The complexity of regional banks with their widely varying exchange rates was replaced immediately apparent. The pace of inflation was unslowed and regional note-issuing agencies continued to operate in remote areas for more than a year. Upon the defeat of the Kuomintang and the establishment of the Peoples Republic of China, the Communist government issued a new form of currency, the ?Peoples Currency,? as a replacement for all other notes in an effort to inject a stabilizing influenced into the disorganized economy. Peoples Currency, Foreign Exchange Certificates and certain local or emergency issues are the only forms of paper money permitted to circulate by the Communist government.,, Monetary System:,,, ,1 Yuan = 10 Chiao,, ,1 Chiao = 10 Fen,,