Of course china uses money like everywhere else. And a lot of payments are done using cash. But the cash here is a bit different than in Europe.
This mainly boils down to the fact, that the biggest bill available in china is the 100 RMB bill. This is currently worth roughly 12.50 €. All other bills are worth even less. Also, coins are used far less often and only go up to 1 RMB (about 0.12 €).
This has two interesting consequences. First: You always have a trousers pocket full of papermoney. A thick stack of bills which is worth about 10 €. I kind of like that. Far more comfy than having a pocket full of €-coins. And still worth so little, that you don’t really care if you lose a bill. (I guess this is similar in the US with their 1 $ bill).
The second consequence is, whenever you have to pay for something a bit more expensive, you deal with huge stacks of money. Making you feel a bit like a gangster in the first moment and making you wish, you had a counting machine the moment after that. (Counting machines are extremely common in china. Basically every cash register has one).
Did I mention, we payed our entire 3 month rent and a safety deposit in cash? This is how some of it looked:
Really, you have to deal with silly big stacks of cash from time to time. You have to make multiple trips to an ATM to get reasonable amounts of cash because they can’t spit out stacks big enough. Stuff like that.
Apparently there is also quite a lot of counterfeit money in the wild. The Chinese will always check 50 and 100 RMB bills for validity. Either by hand or by feeding it through a counting machine.
And there is also the other side of the value spectrum. The smallest bill in circulation (and not quite uncommon) is the 1 Yi Jiao bill, aka 0.1 RMB. So it is roughly worth 1 euro cent.
On the street, prices are usually multiples of 1 RMB. Amounts below 1 RMB are usually only found in supermarkets and similar stores. So you usually put your Yi Jiaos somewhere and hope to remember theme the next time you are grocery shopping.
This is how it looks:
It has roughly the same size and feel as monopoly money. Only, it is worth slightly less then monopoly money.