Author Topic: On the base metal commemorative coins of China since 1980  (Read 417 times)

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Offline Vincent

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On the base metal commemorative coins of China since 1980
« on: December 16, 2019, 11:47:22 PM »
The People's Republic of China began making and selling numismatic products in 1979. Originally, these products were largely geared towards export. The numismatic community in China was very small at the time, although it did exist. The products from 1979 are a mint set and some silver and gold commemorative coins. The first base metal commemorative coins are from 1980.
   A total of eight base metal commemorative coins were issued in 1980. They are all of 1 yuan denomination, all are proof coins, and the mintage is 26,000-29,000 per coin. These are obviously not meant for circulation. The production numbers represent estimates for how many they expected to be able to sell in the numismatic market. All eight were minted in brass, they're yellow. Beginning in 1980, the highest denomination in circulation was a 1 yuan (nickel-coloured) copper-nickel coin. In the Standard Catalog of World Coins (at least some editions) these coins are described as being made of copper, but they are actually yellow, not red (or brown).
   The background for the issuance of these coins is the International Olympic Committee's so-called Nagoya resolution (1979), which permitted mainland China to participate in the Olympic games. (Before that point in time, China had been represented by Taiwan). Understandably, this decision was celebrated in China, and four of the 1 yuan commemorative coins from 1980 were minted in response to these developments. The other four coins commemorate the Lake Placid Olympic winter games of 1980, in which China participated.
   In 1982-84 three additional brass 1 yuan commemorative/thematic coins were issued: 1982 soccer world cup, 1983 panda and 1984 panda. The two panda coins are in proof execution, the 1982 soccer coin was issued in both proof and regular uncirculated versions (I have seen both versions myself). Again, the proof coins are obviously not for circulation. The uncirculated version of the 1982 soccer coin is presumably for the numismatic market only, along with the other brass 1 yuan coins from the same time period.
   In 1984, something new happens. Three different types of 1 yuan coins are issued, all celebrating the 35th anniversary of the People's Republic of China. The production numbers skyrocket, they are now in the millions, rather than the tens of thousands, and the coins are made of the same material as the non-commemorative 1 yuan coin. The production numbers are too high to be explained by response to contemporary collector interest, domestically or abroad. Further commemorative 1 yuan types were issued in subsequent years.
   In order to understand this development, I've had a look at the 2017 version of "中国硬币图录" (a Chinese coin catalogue, mainly focusing on coins of the People's Republic of China).1 This is not a particularly good catalogue, but I found its introduction to base metal commemorative coins enlightening. (This is on p. 30). According to this explanation, the early commemorative coins (beginning in 1984) were distributed to the banks and actually put into circulation. There wasn't a lot of collector interest in these coins at the time. A domestic market in base metal commemorative coins emerged in the early 1990s. In the 1990s, prices on base metal commemorative coins in the numismatic market could reach many times their face value. A bubble developed in the market. This burst in 1997, after that time the development in prices has been more stable.
   This means that domestic collector interest in base metal commemorative coins developed after the central bank had begun issuing them and putting them into circulation. It also means that the 1980s copper-nickel 1 yuan commemorative coins (and presumably also the 1987 1 jiao commemoratives) are circulation coins in every sense of the word.
   Before going any further it might be a good idea to dwell momentarily on the term "流通" (liútōng). This is usually translated 'circulation', but it can also mean 'distribution'. While distributing a coin and circulating a coin is in most cases part and parcel, and the distinction ultimately irrelevant, the base metal commemorative coins may be a case where the distinction is relevant and the terms should not be conflated. Another thing to be aware of is that central banks will always use language along the lines of 'the coin is valid for the purchase of goods in the amount stated on the coin' (making it sound like it is going to circulate), because if they didn't say that it wouldn't be a coin in the first place.
   I have poked around on the website of the central bank for some press releases related to the issuance of commemorative coins. I've picked a press release related to the 10 yuan coin of 2018 commemorating the 40th anniversary of the beginning of political reform.2 According to this press release, after the coins were distributed to the banks, 1) the banks would accept orders for these coins during March 15-17 2019 through their websites and at their branches, 2) each customer is allowed a maximum of twenty coins [i.e. one roll], 3) the coins would be available for pick-up during May 23-26, 4) ID must be provided in connection with both ordering and pick-up, and 5) unsold coins would be available during May 28-30 to whoever may be interested, without limitations. So, first of all, the coins are not simply put into circulation like the 1 jiao, 5 jiao and 1 yuan coins, they are sold to people who specifically order them and go through a formalised process to secure access to their share of this product. Secondly, there's a mopping up operation during May 28-30, where the banks will get rid of any unsold coins, which probably includes quantities of coins that were ordered but not picked up. Most likely, some coin dealers will show up and buy remaining stocks. There's also a provision that says that a person who picks up coins on behalf of multiple persons can only do so for up to five persons in total. This is obviously meant to make it more difficult for coin dealers to circumvent the limitation to twenty coins per person. I have seen other press releases related to other base metal commemorative coins containing similar conditions and time tables, but I'm not going to discuss every single press release here. One dealer on eBay, “theoutsiderx”, describes his experience with acquiring a quantity of 5 yuan 2019 Taishan commemoratives like this: “Although it has 120 million mintage. It is still sold out within 5mins . The DEMAND ARE MUCH HIGHER THAN SUPPLY!!!!”.3 While it is clear that the central bank sometimes uses the term 'circulation ("流通") coin' about these coins, it is also clear that the central bank has no expectation that they are actually going to circulate. They put forth detailed guidelines as to how specifically these coins are to be made available for sale to as many people as possible across China, so that everyone has the opportunity to acquire them. They were envisaged as collectible items before they were even minted. (One should perhaps also not underestimate the propaganda value in such desired items being made by the state and supplied to the people). Thus – at least in my view – they aren't true circulation coins.

10 yuan 2018 commemorating the 40th anniversary of the beginning of political reform.

   So, how did we get from the 1980s situation to the 2018 situation? As we have seen above, a collector demand and a market in base metal commemorative coins emerged in the early 1990s. Now, let's have a look at key developments in China's base metal commemorative and thematic coins after the 1980s.
•   1991: The diameter of the 1 yuan commemorative coins is reduced to 25 mm (i.e. same size as the contemporary 1 yuan non-commemoratives)
•   1993: The first 5 yuan commemorative coin is issued, the composition is copper
•   1997: The first 10 yuan commemorative coin is issued
•   2001: The composition of the 5 yuan commemorative coins changes from copper to brass
•   2003: The first yellow 25 mm 1 yuan commemorative coin is issued
•   2015: The issuance of 10 yuan commemorative coins is resumed after 15 years
•   2019: The first square 5 yuan commemorative coin is issued
Considering that the market in commemorative coins as collectibles caused the coins to be worth more than their face value, the existence of the numismatic market must more or less have prevented commemorative coins from circulating. It is under these circumstances that the 5 yuan (1993), 10 yuan (1997) and yellow 1 yuan (2003) base metal commemorative coins are introduced. I.e., these series of coins were released at a point in time where the central bank knew in advance that they wouldn't end up in circulation – similar to the 10 yuan 2018 discussed above. If the central bank knew this in advance, the purpose of minting the coins cannot have been circulation. While the base metal commemoratives issued during 1984-90 were of the same size and colour as the circulating non-commemoratives, now that the central bank knows that the coins aren't going to circulate anyway, it introduces series of coins (5 and 10 yuan) that don't fit into the existing structure of coinage denominations. They might as well. Thus, the 5 yuan, introduced in 1993, is a large and heavy copper coin, susceptible to damage if dropped, as large copper coins generally are, and thereby impractical as a circulation issue. Similarly, the 2019 square 5 yuan is likely to attract attention from collectors, but would be viewed with suspicion if found in circulation in a country with no tradition for square circulating coins. The 10 yuan and yellow 1 yuan coins would also be strange creatures in circulation, the former because of its denomination and the latter because the colour is "wrong". Surely, it is not a coincidence that these series of "misfits" (in relation to non-commemorative coinage in circulation) arise at a point in time where it is predictable that they aren't going to circulate. On the contrary, what appears to be happening is that the central bank responds to collector demand by issuing coins that are tailored to the numismatic market, rather than to circulation. Because of this, I consider the base metal 5 yuan commemoratives, 10 yuan commemoratives and yellow 1 yuan commemoratives to not be circulation coins. (The nickel-coloured 1 yuan commemoratives of the 1990s onward aren't "misfits" because they are of the same composition as the non-commemorative 1 yuan coins – nevertheless, beginning some time in the 1990s, they too would have been gobbled up by the numismatic market).
   In conclusion, the modern base metal commemorative coins of mainland China can be chronologically divided into three time periods. During 1980-84, the coins were minted exclusively for the numismatic market, which at that point in time mostly implied export. From 1984 to some time around 1990, the coins were minted in large quantities (compared to the 1980-84 coins) and actually put into circulation. There was little collector demand at the time. During the early 1990s, a domestic market in commemorative coins as collectibles emerged, causing the value of commemorative coins to rise above face value. This prevented commemorative coins from circulating. The central bank has acknowledged this and responded to it by issuing base metal commemoratives that are tailored to the numismatic market but would be misfits in circulation; this includes the 5 yuan, 10 yuan and the yellow 1 yuan coins. This is still the situation today.

Sources
1. 许光 (Xǔ Guāng) (ed.): “中国硬币图录” (2017 edition). 黑龙江人民出版社 (Heilongjiang People's Publishing), 2017.
2. People's Bank of China: “庆祝改革开放40周年双色铜合金纪念币第二批次发行工作即将开始” of March 12th 2019. URL: http://www.pbc.gov.cn/huobijinyinju/147948/147964/3783935/index.html (retrieved December 10th, 2019).
3. Quoted from the item description for a quantity of 5 yuan 2019 Taishan commemoratives in a listing on eBay by “theoutsiderx”. URL: https://www.ebay.com/itm/2019-China-HOTTEST-ISSUED-Taishan-5-Yuan-Proof-like-UNC-COIN/123999613807?_trkparms=aid%3D555018%26algo%3DPL.SIM%26ao%3D1%26asc%3D61114%26meid%3D4911609808fe4accad9ebc4978658418%26pid%3D100005%26rk%3D2%26rkt%3D12%26mehot%3Dpf%26sd%3D274124890521%26itm%3D123999613807%26pmt%3D1%26noa%3D0%26pg%3D2047675&_trksid=p2047675.c100005.m1851 (retrieved December 10th, 2019).

Update (November 1st, 2020):
I have added an illustration, formatted sources better (in the form of footnotes) and fixed a few typos.
« Last Edit: November 01, 2020, 08:16:19 PM by Vincent »

Offline Vincent

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Re: On the base metal commemorative coins of China since 1980
« Reply #1 on: December 17, 2019, 10:51:30 AM »
I just noticed this observation by @Pabitra in a post in another thread (here: http://www.worldofcoins.eu/forum/index.php/topic,45622.0.html):

Quote
The commemorative coins are never found in circulation even for those which are released in large numbers with face value of 1 Yuan.
Earlier, the annual issue of Zodiacal commemorative coins ( like the 1 Yuan "Year of the Snake" ) had mintage of 1 billion pieces but there too, the used to be huge queues on date of issue and issue was restricted to 3 pieces per person.
Later, the standard denomination of the commemorative coin has been changed to 10 Yuan bimetallic and they are also issued at face value. One never finds them in circulation at least in cities which are of either tourist importance or export processing zones, visited by importers in large numbers.

Thank you for this report, Pabitra!

These observations are, of course, consistent with what I wrote in the original post.

Offline Vincent

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Re: On the base metal commemorative coins of China since 1980
« Reply #2 on: December 17, 2019, 11:24:45 AM »
And another one. @SquareEarth says, with regard to the 10 yuan 2018 year of the dog:

Quote
No. I’m in China, and I could see that these never circulate.
They might be given as gift money during Lunar new year, but I’ve never seen them being used in transaction.

Source: http://www.worldofcoins.eu/forum/index.php/topic,41564.0.html.

Online Figleaf

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Re: On the base metal commemorative coins of China since 1980
« Reply #3 on: December 17, 2019, 03:51:39 PM »
Thank you, Vincent. Another illuminating article with good evidence for the conclusions. I take it you read Chinese?

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline Vincent

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Re: On the base metal commemorative coins of China since 1980
« Reply #4 on: December 17, 2019, 11:51:19 PM »
Thank you!

I have developed certain methods over the years for dealing with texts in Chinese. Apart from having actually studied the language, through course materials etc., looking words up in dictionaries has become an ordinary and easy process for me. Having decoded Chinese texts over and over, a lot of terminology has become familiar, so I don't need to look it up anymore. Another method I've made use of in the past is to actually discuss a text with someone in China over Skype and see if your ideas of what a given text says actually align. When you realise that you do get the same meaning out of a text when looking at it, you know that you have an actual understanding of the material in front of you. You'll also be better able to judge in each case whether you understand something or you're out of your depth and need assistance. If you're willing to put in the time that it takes to properly understand a text, you'll be rewarded with insights beyond the insights of the text itself. It's an exercise.

I discussed the term "流通" (which is key to our topic) with a native Mandarin speaker years ago, because I felt at one point that I needed to understand exactly what might or might not be implied by the term.

Online Figleaf

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Re: On the base metal commemorative coins of China since 1980
« Reply #5 on: December 18, 2019, 09:14:59 AM »
That's going in the direction of what I do with Russian. I use software for vocabulary and another package for grammar, supplemented by tables for conjugation of nouns, adverbs, pronouns and prepositions. I am not yet at the point where I can get past polite little phrases, but making progress and using google translate for support.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.