1.) You do know the principal of Fiat Curency right?
Let's say I am holding a AUD $100 bill, why it worth $100 when it was just a piece of plastic worth maybe 5c?
This is because the Federal bank of Australia said it worth $100 and guarantee you that you will get $100 of goods when you use that 100 note and not just 5c.
Now, how can the Federal Bank Guarantee that? If the Federal Bank only hold Australian Dollar, it cannot because you cannot use an abstract value (that $100 note) to guarantee another $100 note. There are no value. What you do is you have A$100 equivalent of GBP or USD, so when you can exchange that GBP or USD to a foreign bank, you will have the value of A$100. And bank (say it was a GBP) did the same, they hold 100 Pound value of AUstralian dollar, and sell it back to Australia when they have to release that value. That how our money worth, this is the same system with every other currency, RMB included.
2.) Because you cannot use your own currency to back your own currency. Because it is an abstract value you assigned to your own currency, your Central Bank can literally change it, which mean it have no value.
3.) Can you spend gold? Like cut it up and give it to someone when you buy stuff?? How do you do oversea transfer then? Mail it? What if the other guy did not mail the item to you?