Expat Guide to Banking in China

Welcome!

Thank you for downloading this guide to banking in China. Within thesenext few pages, I'll be sharing with you:

* How to Open a Bank Account in ChinaHow to Open a Bank Account in China* HHow to Setup Online & Mobile Paymentow to Setup Online & Mobile Payment* How to Use an ATM in ChinaHow to Use an ATM in China* How to Wire Money to/from ChinaHow to Wire Money to/from China

You can skip ahead to any of the sections by clicking the links above or justread through directly from here. However you decide to consume thisguide, I hope you'll find the information helpful.

In case we haven't met, my name is Josh Summers and I rst moved out toChina in 2006 with my wife. Back then, we did everything with cash andthere was no such thing as a "smart phone".

My, how things have changed!

My family and I still live out here in China and are loving the life we've beenblessed with. My desire to is provide helpful resources to people likeyourself, many of which you can nd on the TravelChinaCheaperResources Page.

Enjoy!

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Opening a Bank Account in China

So you're thinking about opening a China bank account as a foreigner?Thankfully, it's not a very difficult process.

Personally I have opened accounts with Bank of ChinaBank of China and the Bank ofBank ofCommunicationCommunication, but I’m not here to promote one bank over another.There are plenty of other good China banks including, but not limited to:

ICBCICBC (Industrial and Commercial Bank of China) ABCABC (Agricultural Bank of China) China Construction BankChina Construction Bank China Merchant’s BankChina Merchant’s Bank

As far as a foreigner is concerned, there’s not a huge difference between allthe banks so I recommend choosing yours based on convenience. Whichbranches and ATM’s do you see most often in your city or near yourneighborhood?

Convenience is key.

Not sure if you need to open a bank account in China? Consider this: if youwant simple ways to pay or to do any sort of online shopping on JD, TMallor Taobao (China’s Amazon-like marketplaces), you must have a local bankaccount.

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Why NOT to Open a China Bank AccountBefore I dive into the “how-to” of opening a bank account in China, I rstwant to cover a few reasons notnot to open one.

You’re just a travelerYou’re just a traveler. If you’re just traveling through China asopposed to actually moving here, opening a China bank accountdoesn’t have any real advantages. Most every ATM in China acceptsVisa, MasterCard and AmEx, so save yourself the hassle and just takeadvantage of this.

No Investment ExperienceNo Investment Experience: For those not living in China who want toopen an account in an e ort to diversify your portfolio, make sure youknow what you’re doing. Investment in the Chinese Yuan isn’t crazy asthis Wall Street Journal article explains, but it isn’t for theinexperienced.

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3 Easy Steps to Open a China Bank Account

Step #1: Prepare Proper DocumentationIf you’re still interested to open an account in China, follow these 3 simplesteps and you’ll nd yourself walking around with a new China bank card inno time.

Preparation can be broken down into two simple categories: choosing yourbank and gathering the appropriate documents.

**Which China Bank Should I Choose? **Which China Bank Should I Choose? As I mentioned earlier, themost important factor to consider when choosing your bank isconvenience. Bank of China is the largest in China, but I don’t keepmost of my funds there because there isn’t a branch or ATManywhere near me.

Also, your account is tied to the speci c branch in which you open it.So if you need to change your PIN, report a stolen card or somethingof this sort you’ll need to go back to that exact branch. Anotherreason to pick one near you.

**What Documents Do I Need?**What Documents Do I Need? Believe it or not, the only thing youneed to bring with you to the bank when opening a new account is apassport. They may ask you for a small deposit of 10-20 RMB andsome banks might make you pay for the card they give you, so bringabout 40 RMB as a precaution.

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Step #2: Opening the Account at the BankOnce you’ve picked the bank and put your passport and cash in yourpocket, set aside an hour or two and head over to the nearest bank branch.

If you have a local friend that can accompany you it might speed up theprocess, but it’s not necessary. You should be able to do this by yourself ifyou’re adventurous enough.

The rst place you need to stop is the information deskinformation desk to speak with thesta and get a number. Tell them that you are opening a new account andoften they can help you fill out the form.

Say: “Say: “我想开一个银行账户我想开一个银行账户” – W” – Wǒ xi xiǎng kng kāi yi yīgè yínháng zhànghùgè yínháng zhànghù

Sometimes the form they give you has English as well, but unless you’recon dent can write your address and information in Chinese characters,let the sta do the work. They’ll also likely go make a copy of your passportthat you’ll need later.

When you’re number is called, provide them with your passport and theform. They’ll have you sign a few other documents, tell you how muchmoney is required for deposit and hand a new UnionPay Bank CardUnionPay Bank Card.

At some point during the process a small keypad next to you will light upand scream at you to input a password. All China bank passwords are 6digits long and you’ll probably have to input it a few times while you’rethere.

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Step 3: Using Your China Bank AccountThere are a few di erent ways you might nd yourself using your newChina bank account and your UnionPay card, and each might requirespecific actions.

Using the ATMUsing the ATM: This is the easiest way to utilize your account. Youcan withdrawal cash from the ATM and even deposit cash in some ofthem.

Making Purchases OnlineMaking Purchases Online: if you think you’ll be buying things onTaobao or another China merchant, you’re going to need to speci callyask for them to turn on Internet banking. Otherwise, the card simplywon’t work to purchase.

Wire MoneyWire Money: Each branch has its own wire instructions, so speci callyask your bank what you need. Mine provided me with a printout (inEnglish!) describing exactly what needed to happen, including aspeci c intermediary bank. To learn more about moving moneyinternationally, read my Guide to Sending Money to/from China.

Now that we have our bank account set up and the "online banking"feature enabled, the next step is to get mobile payments set up to makelife in China so much easier.

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Setting up WeChat & Alipay

Prior to the emergence of mobile payment apps in China, the country wasprimarily a cash-based society. From meals, clothing, rent, bills, taxis, andalmost everything else, paying cash was the norm. However today, appslike Alipay and WeChat are transforming China into a cashless-basedsociety where transactions are commonly carried out through paymentapps.

Now that you've opened up a bank account and enabled online payments,it's time to download WeChat and Alipay and get those connected.

We'll start below with why you would want to use either of these apps andthen move into how to set them up and use them when you're in China.

Let's get started!

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Using WeChat or Alipay in China to Pay?Using WeChat or Alipay in China to Pay?The largest bene t from paying with payment apps such as Alipay andWeChat is convenience. At your typical hole-in-the-wall restaurant, co eeshop and convenience store, paying for items is as easy as scanning a QRcode in the store (if you’re not sure what a QR code is, it looks like this).Thus these apps greatly reduce the need to fan through your wallet to ndexact change and you can even consider leaving your wallet at homeentirely.

In addition to standard transactions, these mobile payment apps havetaken the convenience of mobile payment to a higher level by allowing youto pay for bills like cellphone service and Internet with the app. Dependingon your area and provider, you may even be able to pay for utilities likeelectricity and water too.

You can also use Alipay and WeChat to pay items for sale in apps that lackpayment functionalities. For example, with Ele.me or Meituan you canorder takeout at local restaurants and pay using Alipay or WeChat.

Setting Up WeChat & AlipaySetting Up WeChat & Alipay

Once you've downloaded the WeChat and/or Alipay apps and createdaccounts (requires a Chinese phone number), you'll want to locate your"Wallet" in WeChat or your "Pocket" in Alipay.

It's here where you can add your card to begin mobile payments.

Note:Note: It's important that you write out your full name exactly as your bankknows it, which often is last name first.

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Paying using WeChat and AlipayPaying using WeChat and Alipay

Now that you have WeChat and Alipay connected to your bank, it's easy topay with each app using the following steps:

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Are payment apps used all over China?Are payment apps used all over China?If you live in or are traveling in 1st Tier Chinese cities, almost 95% ofbusinesses accept payment apps like Alipay and WeChat (although youmay end up just making a personal payment to the owner’s account, whichis fine).

Amazingly, the same goes for smaller-tier cities in China – although cash isstill the most common method of payment, you’ll likely see a QR codetapes to the front of every cash register in every story you enter. This QRcode is what you’ll use to scan and pay for your items.

Regardless, you can just ask the owner or workers if you can use WeChator Alipay to pay, and they’ll immediately let you know.

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Using an ATM in China

One of the preferred methods of getting renminbi (also called yuan orRMB) while traveling in China is by using local ATM’s. Ten years ago thismight have been di cult, but now with so many banks in every city inChina, it’s almost too easy.

Using an ATM in China isn't much di erent than anywhere else in theworld, but there are a few things to consider that I'd like to share with youhere.

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Which China ATM Can I Use?There are ATMs on almost every corner in China, but not all of them areforeigner-friendly. There are a couple things you need to ask yourself whenfinding the right Chinese ATM to use.

1. Which Bank? Which Bank? Typically you want to nd a Bank of China, ChinaMerchant’s Bank or ICBC. These banks are reliably friendly to foreigncards and have locked spaces to get your money.

2. Which Cards do they Accept? Which Cards do they Accept? You’ll usually see a sign in front of theATM that tells whether it accepts Visa, MasterCard, Amex or anyothers. For the most part, if you have one of these three creditproviders, you’ll be fine.

3. Do I Use Credit or Debit? – Do I Use Credit or Debit? – the bank will accept both, but you’ll saveyourself a lot of extra fees if you use your debit card to withdrawmoney. Make sure you know your PIN! If you want to get cash witheither your debit or your credit card, you’ll need your PIN number.Didn’t know your credit card had a PIN? Then don’t expect to get cashwith it!

4. How Much Money Do I Need? –How Much Money Do I Need? – ATMs have a limit to how muchmoney you can take out per dayper day, usually capped at about 2,500-3,000RMB depending on the bank. If you need more than this, you’ll need togo inside the bank or use multiple cards.

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General Tips on Using a Chinese ATMAll Chinese ATMs have the option to choose “English” as the language intheir menu, so don’t think that your language skills are going to hinder youfrom getting money.

The avoid any problems, it’s best to keep the following tips in mind:

Tell Your BankTell Your Bank before you leave that you’re traveling to China. Thiswill avoid any problems with them denying any service because theythink your card is stolen. Be Prepared with a Backup Plan Be Prepared with a Backup Plan in case they do deny yourwithdraw. Either bring an extra credit card or have some traveler’scheques handy. Know Your PINKnow Your PIN because the ATM will most certainly ask you for it,even if you’re using a credit card. Factor in FeesFactor in Fees when you think about your budget. ATM’s willsometimes charge you a fee, and then your home bank will likelycharge you a non-bank ATM fee (waived with some banks, so checkbefore you leave) in addition to an international currency exchangefee. It’s usually about 3%, so be ready for it.

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Sending Money to/from China

There are often cases where we, as expats living in China, need to move alarge sum of money into or out of China.

While many of us are simply uncomfortable strapping thousands of dollarsto our bodies to walk across the border, every country limits how muchyou can carry (Chinese regulations limit you to 10,000 RMB or theequivalent of 5,000USD). Luckily there are alternative ways for sendingmoney overseas and this guide introduces you to a number of them to getyour money out of China quickly and easily.

Below I would like to detail some of the best ways to legally move moneyboth online and in person.

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How to Send Money Abroad OnlineIf you want to send money abroad fast without going out your door, youcan easily send money using your laptop computer or mobile phone.

**ImportantImportant: many of these options require you to have opened aChinese bank account. If you already have one, be sure to request fromyour bank in China to enable online money transfers; otherwise you will beunable to use these services.

Option 1: Transfer Funds via HiFX (Recommended)

Although we’re providing a lot of di erent options here, I’d like to start withone that is highly recommended if you want to transfer funds onlinewithout paying exorbitant fees – HiFX (for readers in the UK, visit the HiFXU.K. site). In most cases, particularly when you’re dealing with a bank wiretransfer, you’re going to get hit with wire fees, intermediary bank fees andeven poor exchange rates.

Unlike banks, transfers via HiFX can be tracked online 24 hours a day. Thisis the one thing I hate most about doing a wire transfer with my bank –there’s no way to track my money so I always feel like my money hasdisappeared into thin air.

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HiFX acts more like a currency broker between parties than any type ofnancial institution. Their rates are transparent and they even allow you to

“order” an exchange rate, meaning you tell them the rate you want andonce the exchange rate hits that mark they will make the trade for you.

Fees: Fees: HiFX makes its money through the exchange rate, so there is noadditional “fee” per se. There is a minimum $50 payment minimum tomake it worth their while, but based on my research it seems thattheir exchange rates are very competitive. Time:Time: Transfer takes 3-5 business days, depending on your banks.Initial setup may take a bit of time as they require proof of identitybefore you start. **Special Note:Special Note: It seems that China makes it di cult to trade in CNY,so if you’re wanting to trade from USD you’ll be ne, but you mighthave trouble with CNY. Bottom LineBottom Line: This is an excellent option for moving large amounts ofmoney and is a very transparent process (as opposed to other optionsbelow where fee structures are quite complicated).

Learn More About HiFX

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Option 2: Transfer Funds via PayPal

Another option I recommend for sending money online is through thePayPal service. To get started, simply create an account and link yourChinese bankcard to your account. Afterwards you can add money to yourPayPal virtual wallet and then send it to the receiver using his/her emailaddress, or phone number. Although the transfer is instant, it takes acouple days to withdraw the money from your virtual wallet into your bankaccount.

In terms of exchange rates, which are determined twice daily, PayPalallows you to see the current exchange rate, when you log into your PayPalaccount. To do this click PayPal Balance, then Manage Currencies, whereyou can then enter your information and click Calculate.

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Fees: Fees: PayPal charges a cross border fee due to extra costs involved inprocessing multi-currency payments. Cross border fees oninternational money transfers using a PayPal balance or bank accountranges from 0.5% to 2% of the payment amount. For payments madewith a credit or debit card, the fee runs from 2.9% to 7.4% plus anadditional xed fee based on the country of the payment recipient. Formore specific numbers you can visit this Paypal page. Time:Time: Instant virtual transfer; 3-5 days to withdraw to your bankaccount. Bottom LineBottom Line: The process can be done from your computer, but thecross border fees can be expensive for sending large amounts.

Learn More about Paypal

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How to Send Money to/from China(Multiple Options)

How to Send Money in PersonDon’t be ashamed if you’re one of those people who prefers to avoid theinsecurities of online banking! If that is you, here are a few options forsending money to/from China in person.

Option 1: Wiring Money from the BankIf you are more old fashioned or simply want an opportunity to improveyour Chinese, you can of course wire money abroad through banks inChina. Overall, wiring money from your bank account in China is a prettystraightforward process. But this process does have its downsides.

First is that many Chinese bank employees are not entirely familiar withwire transfers process or assisting foreign customers. If you’re in China, Irecommend visiting your bank’s main branch in town to oversee the wiretransfer. Secondly, to control large capital out ows, foreigners arerestricted to only sending a measly 500USD per day. Chinese nationalshowever, can send up to 50,000USD per year. One option is to nd atrustworthy Chinese friend to assist you in transferring the amount inhis/her own name.

Finally, you must be an account holder with whatever bank you want tofacilitate the wire transfer. So if your Chinese friend only has an accountwith Bank of China, you must do the transfer there.

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Wire transfers at banks require the following information: your passport,the receiver’s name, address, and account number, the name and addressof the bank along with the bank’s international bank account number(IBAN), and its society for worldwide interbank nancialtelecommunication (SWIFT) code or bank identifier code (BIC).

I personally recommend Bank of Communications for wire transfers. Totalfees for wires amount to no more than 170RMB making it much cheaperthan their competitors. Personally, I haven’t been charged any wire feesusing BoC.

Fees: Fees: Both the foreign and Chinese bank may charge a wire fee. Checkwith each bank individually to learn more. Time: Time: Once the transaction has been completed, it takes anywherefrom one to ve days for the money to transfer to the overseasaccount. Bottom LineBottom Line: If you are old fashioned and do not prefer sendingmoney online, wiring money at a bank is relatively easy but can incurhigher fees than using Alipay or buying bitcoin.

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Option 2: MoneyGramMoneyGram is among the top options among my friends in China forsending money overseas. MoneyGram has operations in over 200countries around the world and here in China, they usually have arepresentative in almost every major bank. Their large presence speaksconvenience and their process for sending money is prettystraightforward. Unlike other options that take 3 to 5 days to complete thetransfer, money sent through MoneyGram (click here for MoneyGram UK)is immediately available making it a great option if you are in a hurry.

The service I primarily use with MoneyGram is sending money to a personoverseas. How this service works is you bring the sum of money you wantto send in cash to an agent, present your passport, complete the moneyform, and list whoever will pickup the money in the recipient country. Theagent then provides you with a tracking number (MTCN), which thedesignated recipient uses to collect the cash.

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While the service is relatively easy, I have had a number of problems with itin the past. One thing to remember is that you must list the recipient’sentire name as listed on their identi cation. I made a mistake once where Ileft out my sister’s middle name on the money form. Because my sister’smiddle name is listed on her driver’s license, the omission of her namefrom the form compelled the agent to withhold the funds. So be sure to listall the information of your designee as listed on their identification.

Another problem with MoneyGram is that locations not attached to a bankdo not have a lot of cash on hand. A number of times I have sent amountsof around 5000USD to the United States and my sister had to call manybranches before nding an agent with enough cash to complete theservice. If sending amounts over 500USD, I recommend having yourrecipient request money order when making the pickup throughMoneyGram. Also, if sending through the UK, you’ll want to check out theMoneyGram UK site.

Fees:Fees: Anywhere between US$15-$40, depending on the amount beingsent. Time:Time: Immediate Bottom LineBottom Line: If you need to send money overseas and have itavailable instantly, MoneyGram is the way to go.

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