Money Matters

Money Matters

Changing money

Obtaining RMB in Western countries can be difficult or impossible, and the exchange rates are often unfavorable. It is generally more convenient and economical to obtain RMB in China by using foreign bank cards or traveler's cheques or exchanging major foreign currencies.

Keep all your exchange receipts if you wish to convert your RMB back to your original currency later. This is to ensure that only RMB bought in China is bought back (the economic logic is too arcane to go into here). This includes cash withdrawals from ATMs, and any other exchange medium. Exchanging currency outside of official channels (i.e. if you lose your receipts) is technically illegal, although enforcement of these currency controls is lax, and exchange rates are not any better than through official channels.

ATM cards

Most Chinese ATMs will allow for withdrawals from foreign bank accounts for a small, flat, out of network fee. Before traveling, find out if your home bank charges a currency conversion fee (often between 0-3%) on such transactions. A list of fees charged by major U.S. banks can be found here. It may be worthwhile to open a zero conversion fee account beforehand (such as through an online banking institution) for the purposes of your trip. Whichever bank you use, you will likely need to contact them before your trip and tell them to allow ATM withdrawals from China (as these actions might be flagged as suspicious and blocked otherwise). Be sure to specify if you plan to make transactions in Hong Kong, Macau, or Taiwan as well, as your bank may consider these regions separate from Mainland China.

In recent years the official exchange crossrates are the real rates because it has become far easier to purchase foreign exchange directly from banks: Chinese simply have to fill in a form and specify the reason for the forex purchase. The airports in Beijing and Shanghai have cash machines which accept major international debit/credit cards. Be sure to check for the Plus or Cirrus symbols (whichever your bank supports; those on the PULSE network can use most UnionPay ATMs, a slight edge over the rest), as there are many ATMs which are not linked to international networks and may retain your card, a very unpleasant prospect, although your card will very probably simply be rejected.

Some machines that show the Maestro or Visa or Cirrus signs will not necessarily deliver cash for a foreign card. However an adjacent, apparently identical machine in the same bank lobby may work. If you cannot get cash from one machine, just try another.

If you have trouble because the ATM requires a 6 digit PIN and you only have 4 digits, try 2 leading zeroes (although this may not be necessary - try your actual PIN first). Also, when venturing into more remote regions, it is advisable to carry sufficient cash, as ATMs with international network access may not be available. If you find yourself in a town with a Bank of China branch but no international network-capable ATM, it may be possible to get a cash advance on a credit card inside the bank. Just ask.

There is some counterfeit currency is in circulation: NEVER change money in the street! Counterfeiting affects 20, 50 and 100 yuan notes. IF it affects 5 and 10 yuan notes, nobody seems to much care. There are several reports of counterfeit 100 yuan notes being dispensed by ATMs of the ICBC bank: avoid them. The best prevention is to centralize purchases and patronize the same shops. Some of the ink on 100 yuan notes _should_ come off when the note is rubbed against a hard dry surface. Look for the watermark, iridiscent ink on the figure "100" printed on the front side, the metal strip Chairman Mao's hair should have a distinct texture to it.

Travelers cheques

Foreign currency and/or traveler's cheques can be exchanged into RMB in most banks as well as decent hotels in major cities with varying levels of difficulty, and you will be required to show a passport or identification. Your signature on your passport will be compared with the signature on the traveler's cheques, and your cheques and passport itself may be scrutinized to be sure of authenticity. If the signatures aren't an exact match you may be denied, or it might take a lot of persuading on your part. Providing a receipt with a matching signature may help. Using dual signature travelers cheques such as those provided by American Express can cause quite a hassle if both parties aren't present. As well, carrying travelers cheques for a currency other than your own causes suspicion and concern even at major banks. A Canadian citizen using American travelers cheques took almost two hours to cash them at a major branch of the Bank of China. However, traveler's cheques get much better exchange rates than cash when exchanged at a branch of the Bank of China.

Cash to cash conversions

Exchanging US currency for RMB can be much simpler, but expect the bills to be heavily scrutinized before the exchange is processed. Opportunities to buy RMB before entering China, for example when coming overland from Hong Kong or Vietnam, should be taken, as the rates are better. The same is true going the other way - selling just across the border will often net a more favourable rate. Also, most banks will allow you to get a cash advance via a debit or credit card. It's useful to carry an international currency such as British Pounds, US Dollars, or Japanese Yen to fall back on should you not have access to a cash machine.

Counterfeiting is a major issue when exchanging money in China. While exchange rates may look attractive, unless you have a local friend to help you out, do not exchange money at private money changers. It is not uncommon to exchange a large amount of cash only to find that most of what you got is fake. Stick with the Bank of China or one of the other large banks as even though you get slightly worse rates, the risk of getting counterfeit bills from them is close to zero.

Electronic transfers

Electronic money transfers to another country are difficult. Most banks don't offer this service; you need the main branch of Bank of China, and even they may not do it except in major cities. Service charges are high, the staff is often not properly trained, and the process can take up to a week.

It will be MUCH easier if you have an dual-currency account with the Bank of China - opened at the branch from which you plan to get your money. Electronic transfers to dual currency accounts incur no or very low fees although it still will take about one week. All you need to start is your passport and visa and a small initial deposit (can be RMB) plus the new-account fee (¥10-20).

Western Union have deals with China Agricultural Bank and with China Post so there are a lot of Western Union signs around. This is what overseas Chinese sending money to relatives, or expats sending money out of China, generally use; it is generally easier and cheaper than the banks. There may, however, be problems. Their "system" may be "down" or the employee you deal with may ask for silly things — for an overseas transfer, the recipient's passport number and visa number; for a within-China transfer, cash in US dollars. Just try another branch.

If you open a foreign currency account or a dual currency account, check if you will be able to access it in another province (e.g. the Bank of China does not allow this as of 2006).

Credit cards

Outside of hotels, major supermarkets, and high-class restaurants, credit cards are generally not accepted (not even in places such as KFC), and most transactions will require cash. However, those with Discover credit cards will find that their card is much more widely accepted (under the UnionPay system) than those with Visa/Mastercard/AmEx. Most convenience stores take UnionPay, as do most restaurant chains, stores selling high-value items, grocery store chains, and most ATMs. Beware of pickpockets.

Many stores have point-of-sale terminals for Chinese bank cards; typically these will not work for foreign cards (because of the nature of Discover's agreement with the UnionPay network, it is treated as a domestic card at ATMs and point-of-sale). If you are going to spend a lot of time in China and use significant amounts of money, consider getting a Chinese bank account.

In the vast majority of cases, price of goods already have Value-added Tax (VAT), and any sales tax included, so anything with a marked price tends to be sold at that price or slightly below, but there is large room for bargaining if there is no stamped price. If you are buying anything which is not from a fixed price store, bargaining is normal, though you may get a better price if you let a local person do the buying for you. Vendors will charge the lowest price to local people (who can speak the dialect), next lowest price to other Chinese nationals, and the highest price to foreigners. Bear in mind, however, that some middle and upper class locals may not be willing to bargain as mercilessly as you would. If you want to get the best price possible, arrange for a friend to visit the site and make the purchase without you. Even if a Chinese person is doing the bargaining, the sight of a foreigner will inflate the price.

Many visitors come looking for antiques, and hunting in the flea markets can be great fun. Be aware however that the overwhelming majority of the "antique" items you will be shown are fakes, no matter how convincing they look and no matter what the vendor says. Should you have bought a real antique you may be in for some serious trouble (See Shopping below). You are advised not to spend serious money unless you know what you are doing, since novices are almost always taken for a ride.

Costs

Unless you are heading to Hong Kong or Macau, China is generally a cheap place to visit. That is if you eat the local food, use public transport and stay in a decent hotel. ¥100 is a perfectly serviceable daily backpacker budget. However, if you want to live an extravagant lifestyle and eat only Western food, even ¥1000 a day may not be enough. There is widespread variation in prices depending on where you go, with big cities like Shanghai, Beijing and Guangzhou generally costing more than the rural, more inland parts of the country. Shenzhen and Zhuhai are also known for being expensive by Chinese standards (which is still relatively cheap by Western standards) as many residents of Hong Kong and Macau, who are generally more affluent than their mainland Chinese counterparts, often go there to shop.

Tipping

Although tips will be accepted if given, keep in mind that the Chinese, for the most part, don't tip at all for common services such as taxis, haircuts, deliveries, massages, food or bar service. A tip might be a nice idea if someone goes way out of their way for you or if they provide exceptional service beyond what they're required to do in their job. It may also be a good idea for a driver or tour guide on a multi-day trip. A bellhop at a nice hotel might expect a tip. Otherwise, tipping is not expected.

Banking

Opening a bank account in China - especially an RMB-only account - is a very straightforward process. You only need your passport with a valid visa (tourist visas are acceptable). For long-term travel or residence, a Chinese bank account is a very good idea. Your ID and PIN are required for withdrawals at the counter although deposits can be made no questions asked if you have the bank book they issued with your account. Banks usually charge a fee (around 1%) for depositing and withdrawing money in a different city than the one you opened your account in. ATMs are now present in almost all towns and cities except in the most remote areas. Many ATMs accept Visa, Mastercard, AMEX, Maestro, and Plus debit and credit cards although some only accept Union Pay cards.

Bank of ChinaThe Bank of China is probably the most useful bank for travelers and foreigners living in China. Bank of China ATMs are often the only ATMs where a foreign bank card will work. Many branches have English-speaking staff and the bank has the authority to deal with foreign currencies, unlike many of the other banks. Almost all cities, big and small, have a branch but not all have ATMs or currency-exchange services. However, some remote areas have no branches even in larger towns so be prepared for such situations. Opening an account with the Bank of China costs only ¥1 and the minimum initial deposit is only ¥1 but you will be charged ¥15 if you want a Union Pay debit card. You will receive a bank book as standard in which will be recorded all transactions and balances - including foreign currency balances. The Bank of China is also the best choice for sending and receiving bank transfers as it is quicker than other banks.

Source: http://wikitravel.org/en/China