Finances while in China

[djkasumi]

Hey all,

I'm looking for input on how people handle their money while staying abroad in China for an extended amount of time (let's say 6 months or longer). For example, do you open a new bank account with a bank in China and transfer money? Do you rely on pulling money out of your home bank via ATM and so forth and suffer fees?

Assuming you will have no real income while in China, what is the best way to get money from your home bank and into your hands with the least amount of trouble and (especially) fees?

[stoney]

Just use an ATM card. I'm from Canada and my card has always worked in China. The transaction automatically converts CAN to RMB and the fees have never been an issue for me. Since you say you will have no income, then you shouldn't need a Chinese bank account.

[Scandinavian]

I agree with Stoney. However you can open a bank account if you feel this would be better. I did so with only my passport as documentation. Some bank accounts can only hold RMB and some can hold international currencies. This means in the first case, you would not be able to transfer anything but RMB to that account. The international currencies accounts can hold the foreign currencies, meaning that they will sit in the account as e.g. USD and needs to be exchanged to RMB before you can pull them out. If you bank "at home" does not have high fee's for you getting cash from an ATM then using a card from home is the easiest. If you do use a chinese bank account you would also lose some money in the exchange rates, so either way can have some advantages.

As a foreinger in China you will not be able to get other cards for your account than UnionPay, which are very usable in Asia.

[driftman]

Two main options:

Bank Card

A lot of people just use their ATM cards, which is quite simple. The trick is to make sure that you can withdraw as much as possible per transaction, as usually there is a fee for each time you withdraw money. Many ATMs in China only let you withdraw up to 3,000RMB, but some will let you take out 5,000 each time (up to a maximum of 20,000 in total per day). Make sure your card at home does not have a withdrawal limit on it, as it is no help that a Chinese bank lets your withdraw 5,000RMB when your bank only lets you take 200 USD a day.

Bank Transfer

Opening a bank account in China is relatively easy, all you need is your passport (stay away from the Bank of China - you will be waiting for hours) and a bit of time. All RMB bank accounts also have a Euro, USD, Yen, AUD and SF account attached to it, so you can transfer money from your home country in any of those currencies to China (important: do not transfer RMB, as you cannot transfer RMB from outside of China into the country) and then exchange the money in China into RMB. One thing that is important to pay attention to is that you exchange the money at the bank before withdrawing it as that way you can get the "buying rate" as opposed to the "cash buying rate" which is more favourable to you. You can check the exchange rates on http://www.boc.cn/sourcedb/whpj/enindex.html

A transfer to China only takes 2-3 days, make sure you spell the receipient's name (you) exactely as stated in your passport. Chinese banks are very anal about spelling and even changing the position of your middle name in the full name might lead to the transfer being rejected. Ask the bank to get their SWIFT code (in case you are from Europe: China does not use the IBAN system).

I honestly do not know which way is cheaper - you would need a financial consultant to go through all the different charges, exchange rate differentials etc. to go through, but I guess the difference is not big. Either way works fine, back in the day I did a bank transfer as I was planning to stay for quite some time and needed a relatively large amount of money quickly to pay for tuition fees and rent. Once the money is in the country this works fine and also protects you against exchange rate fluctuations, which has been a bit of an issue recently.

[lukejmo]

As people have already stated, ATMs definitely work but the fees can add up. If you are going to be paying for an apartment or plan on doing a lot of shopping, I think the fees associated with transferring money in bulk to a Chinese bank account will end up being much less. Also, you have a better chance of being able to use a debit card with a merchant if it's in a Chinese bank. Many places don't take Visa but do take the Chinese Unionpay.

One consideration with transferring money: At least for my American bank, they wouldn't permit me to set up a wire transfer to my Chinese account once I was in China. Lesson learned: Minor details that you don't even know about can become major headaches. Talk to your bank before you move and find out the exact details of how you'd transfer.

If you know you'll be here for awhile, I think a Chinese account would be more convenient.

[djkasumi]

Thanks for all the input. I am going to look into how much a wire transfer would run in terms of fees. As Driftman said, having money already exchanged in a Chinese bank account would protect against fluctations, something I'll keep in mind.

My past experience was limited to only 5 weeks, so I just relied on my American debit card for withdrawals from ATMs. Each time I used my card to pull money out of Chinese ATMs, I was actually only getting a 0.80% exchange fee, so it wasn't too bad. So, my initial thought was to continue doing this while I'm there for 11+ months, but I wanted to check if anyone else had some tips or tricks. ;)

[heifeng]

Here is one option assuming you are in the US (Oregon)

Bank of America has a partnership (thingy arrangement or something) with China construction bank: lookyhere at the FAQ's and then click where it says:

What is the Global ATM Alliance? (when I link it, it's just going to the main FAQ's page, so you'll need to click on this global alliance answer/description question on the Bank of America website)

THEN, under the table it says:

In addition, Bank of America has arranged for you to use your debit or ATM cards in China at China Construction Bank ATMs (China Construction Bank ATMs in Hong Kong are not included) and in Mexico at Banco Santander with no ATM Operator Fees or Non-Bank of America International ATM fee. International Transaction Fee of 1% for converting your currency may apply.

Anyway, I used this arrangement (separate account & mailed card..hehe) in lieu of a wire transfer when I needed to send funds TO China. Also, as recently as this xmas my coworker said he had no problems getting $$ from CCB ATM's during his vacation, so it seems like the alliance is still going strong. There really should be 0 fees b/c I do not even recall that 1% transaction fee being applied

Also, the best way is for money to miraculously appear in said account.....have fun!

[xuefang]

make sure you spell the receipient's name (you) exactely as stated in your passport. Chinese banks are very anal about spelling and even changing the position of your middle name in the full name might lead to the transfer being rejected.

Make sure you spell the name exactly as the bank put it in their system. For example my name is much much longer than Chinese names, first name 4, second name 9 and last name 8 letters long. ICBC couldn't write a name that long so they wrote my name like this: LASTNAMEFIRSTNAMESECONDNAM and the final letter is missing. I have to use this exact spelling of my name when I make a transfer.

[panda23]

If you're in China as anything other than a short-term tourist, I suggest you open a Chinese bank account. You then don't need to worry about your bank's daily/weekly withdrawl limit, and if you buy anything expensive from a large store you can just swipe your Chinese debit card rather than going to the ATM and carrying a lot of cash on you. Also, I have found that anything less than 4 star hotels will generally not take your foreign credit/debit card, so its easier to just pay with your Chinese card.

The only drawback is initially getting money into the Chinese account, as (at least in my experience), you can't initiate a wire transfer from your home country bank while you're abroad, and you obviously need the Chinese bank info before doing it. Also, your home country bank may or may not be knowledgable about details. For example, a Bank of China employee in my home country told me to use a paper bank draft to transfer the funds between banks the first time, however, the fact that this requires at least a month was never mentioned (and no, having an account with Bank of China in your home country does not help in any way).

[imron]

I have to use this exact spelling of my name when I make a transfer.

These are lessons we learn the hard way

[roddy]

It shouldn't be that hard to come up with a rough idea of how much money you need to move and what it'll cost you.

Bank card costs: (Your overseas bank's exchange rate on any given day * amount of cash) - (ATM fees * number of withdrawals necessary)

vs

Transfer costs: (Your Chinese bank's exchange rate on any given day * amount of cash) - wire transfer costs

Then weigh in non-cash factors like days spent hanging around the bank asking if your transfer has arrived, the chances of getting stuck with a chunk of Chinese cash you don't want, etc.

[mariafuschino]

I plan on studying abroad in China for just one school year this coming September and I don't understand at all what to bring money-wise. Will I be able to get money from an ATM with my debit card? Even if that bank is not in China? Do I need to talk to my bank about converting money? Can I use a credit card?

I really have no idea where to start. The organization that accepted me into the study abroad program recently lost the person in charge of this program, and the new person has no idea what is going on and really can't help me. Please help? Thank you!!!!

[edelweis]

Maria:

first you need to check with the school how you will pay tuition and accommodation fees.

Will you be able to use a card, or will you need to bring cash?

You also need to check what amount you will have to pay on arrival (1 semester? full school year?)

Then you need to go to your bank and ask to following questions:

- is your card an international card? (if it is a national card, you'll need to change that.)

- have they blocked payments in China? Inform them that you will be going to China, and they need to honor payment requests from China.

- what are the fees that you bank charges for payment or withdrawal in China?

- do they have an agreement with a Chinese bank that lets you withdraw money from the Chinese bank's ATM with reduced fees? (this is not at all mandatory, but some banks do have such agreements)

- what are the limits for payment and withdrawal? (my card has monthly and weekly limits on both. You need to make sure that you will be able to pay your tuition and accommodations and so on.)

- if you open a bank account in a Chinese bank, will you be able to initiate a money transfer from your current bank to the Chinese bank while in China?

- what should you do if you lose your card while in China?

- can they provide you with some RMBs? (for transportation from the airport to your accommodation, just in case you are not able to withdraw RMBs at an ATM in the airport.)

- note down the name and phone number and email address of your bank advisor in case you need to contact them from China.

You might want to bring some emergency money in traveller's checks or in cash that you can exchange at a bank.

Additionally you should read the posts above...

[abcdefg]

If you plan to rely solely on ATM withdrawals using a bank card issued back home, I'd suggest bringing two different cards in case one gets lost, stolen, or cancelled. Getting a replacement sent to you in China can be done, but isn't always a simple matter.

Also, several times my US issued Visa or Mastercards have been "locked" or "frozen" by an overzealous "fraud detection team" of the issuing bank for "suspicious activity." When I've called them to see what the problem was, I was told "Someone is trying to use your card in China." That "someone" was me. This has happened even when I have notified them in advance of my intended travel.

Sometimes the problem can be handled quickly and easily via a phone call, and sometimes it cannot. Good to have a backup.