Because of the compulsory settlement of foreign exchange under the foreign exchange management system, every foreign exchange account that enters China and wants to spend money domestically can only convert it into RMB. The amount of foreign exchange that comes in can be converted into RMB according to the exchange rate and put into the domestic market. The greater the net increase in foreign exchange each year, the more RMB the SAFE will issue.

The People's Bank of China and the State Administration of Foreign Exchange are the only note-issuing institutions, didn't you know?