Capital Inflows / Outflows

[whitekblackq]

Hiya.

I've opened a BOC account in Zhuhai (I live in HK). Can I access that account elsewhere in China? Should I just wire RMB from my HK account to my BOC account? Are there any difficulties to be encountered in wiring money in or out of China, i.e. capital controls, taxes, big delays? I am only planning to study for 3 months or so but it is also possible that I might invest in property in Yunnan so I'm just curious if there are any potential pitfalls - if so I might bring more cash myself or just use a debit/credit card. Many thanks.

[imron]

I'm not sure what the situation is like now, but a couple of years ago BOC accounts were only valid in the province where they were opened. I've not really had any dealing with the BOC since then, as I avoid it whenever possible. IMO, its the worst of the big Chinese banks.

[roddy]

You can certainly use your BOC bank card outside of the home province - that's a given with the 银联 network. Over the counter transactions with your bankbook should be possible, but to be honest I wouldn't be too keen on trying anything complicated - replacing a lost card, etc. Best to have your account where you actually are (yet another piece of advice I've given, not taken).

[cdn_in_bj]

Your bank card should work anywhere in China, however transactions using your bank book from outside of your "home" province may be subject to inter-provincial fees and/or restrictions.

Also, I believe the above also applies to the other banks as well.

As for capital controls, you'll probably encounter more problems getting your money out of China rather than bringing it in. Best to become familiar with the rules before you make your move.

[imron]

You can certainly use your BOC bank card outside of the home province

This was not true for my friend who had a Jiangsu (or some other province near there ) card that couldn't be used in Hebei. Perhaps things have improved over the last couple of years though.

[roddy]

Actually given the provincial nature of Chinese banks, maybe there are still local-type accounts - not implausible. For what it's worth my Beijing BOC card works in Dalian, although I pay some fee or other for the privilege with every withdrawal (actually less if I get money over the counter, but the saving does not cover the opportunity costs involved with standing around in the bank waiting for every single customer to claim no, they never had a PIN number and then getting it set to 888888)

[imron]

I think Beijing is the special case. My friend's Jiangsu card would work there too, just not in any other province.

[whitekblackq]

Many thanks.

I do hear that you can get pretty good RMB savings rates in China around 3.8% or maybe even higher which I was also hoping to take advantage of (<1% in HK...). So bringing RMB to China would be a no-brainer, unless of course I can't bring it back!! 1) Anybody wired money out of China to HK, or anywhere else? What are the pitfalls in doing this - I am sure there are some. 2) What tax do you pay on this interest income?

[simonlaing]

There can be issues changing money back into foreign currency.

When you change money to RMB they give you an exchange of currency receipt. You should keep it and when you change RMB back out into forex you can use it. The receipt is only valid for 6 months.

The work around which most trading companies use is also having an account or company in Hong Kong. You can transfer RMB money into hong kong banks. There you can change it into Hong Kong dollars and then into any other currency.

If you're thinking of investing in real estate you should be aware of these and the added costs of changing money once you sell the chinese real estate.

They have said there is more relaxation , and people can change money if they have visas or other legitimate reasons, or you have an account with the couple of international banks open in china (min 100,000 RMB deposit I think for most).

People think though within 10 years the RMB will completely float its currency and changing money won't be a problem.

Good luck,

Simon:)

[cdn_in_bj]

The work around which most trading companies use is also having an account or company in Hong Kong. You can transfer RMB money into hong kong banks. There you can change it into Hong Kong dollars and then into any other currency.

Does this also apply to personal HK bank accounts?

They have said there is more relaxation , and people can change money if they have visas or other legitimate reasons, or you have an account with the couple of international banks open in china (min 100,000 RMB deposit I think for most).

I also remember hearing that being able to show proof of having paid Chinese income tax on RMB earnings that you want to change is sufficient, too.

People think though within 10 years the RMB will completely float its currency and changing money won't be a problem.

Yes, and I wouldn't be surprised if it happened earlier.