Understanding Chinese Money - An Essential Guide for Travelers and New Residents

Understanding Chinese Money - An Essential Guide for Travelers and New Residents

History

Money as a payment mechanism in China can be traced back 3,000 years, with cowry shells believed to have been the earliest form of currency. The Chinese are credited with the early development of the modern coinage and banking institutions which are used today.

The Chinese were the first civilization to use paper money- having invented paper and learning to print on it by 1040 AD. Chinese notes were made from the bark of mulberry trees and the strings of money depicted on the front showed the value. In contrast, the West didn’t start using paper money until the 16th century!

The Chinese currency today  

The official currency is known as RenMinBi (RMB), which literally means ‘The People’s Currency’

It comes in three units:

1 Yuan (元) = 10 Jiao (角) = 100 Fen (分)
(NB. Yuan is often referred to as Kuai, and Jiao is often referred to as Mao)

Notes are issued in denominations of:

100元, 50元, 20元, 10元, 5元, 2元, 1元, 5角, 2角 and 1角.

Coins are issued in 3 denominations. 1元, 5角and 1角

 

 

Beware!

1. Counterfeiting
You need to be careful of fake currency, as it can be common in China. Before leaving a store or taxi, check the texture of the note and the Mao Zedong watermark on the left hand side. You could also look for the silver foil stitched strip, which is difficult to fake convincingly

2. Security

Due the relatively low value of the highest denomination (100 yuan) bank note in China when compared with other currencies, bear in mind that if you intend making any large cash transactions while in China  you will need to consider your security in carrying such a conspicuous volume of money around with you.

Banking

China’s major banks include the Bank of China, ICBC, China Merchants Bank, China Construction Bank, HSBC, and Citibank. There is variation in the services which these banks offer to expats, and each has benefits and drawbacks depending on your requirements. For example, all of the banks mentioned above allow foreigners to open multi-currency accounts, but not all offer adequate English online banking.  The documentation needed to open an account also varies between banks, but all require passports. 

HSBS and Citibank both apply fees to certain accounts, and impose charges if the balance drops below a set level. 

Due to the potential lack of English-speaking advisors at you local bank branches, and the complexities of opening a Chinese bank account, we strongly advise that you get in touch with APA before proceeding. We can help and support you in choosing and opening the best bank account.

Converting Currency

Converting Foreign Currency into RMB

•  A maximum of 50,000 USD （or the equivalent in another foreign currency）can be converted into RMB every calendar year

•  If an individual wishes to transfer over 50,000 USD, they will need to provide supporting documents to the bank to explain the purpose of that money

• This means that expats who rely on foreign currency transfers for the bulk of their living costs are faced with difficulties

• When converting money, a foreign national needs to take their original passport to the bank every time.

•   However, HSBC has the option whereby the account holder can change a foreign currency into RMB without going to a branch of their bank.

Converting RMB into Foreign Currency

• Converting RMB into a Foreign Currency to take out of China can be complicated. The applicant will require their original passport, employment contract, Work Permit, a proof of income from their company, and an after income tax certificate which shows how much tax they have paid in China

• If an assignee wishes to transfer only a small amount of RMB to a foreign currency, and the initial foreign currency to RMB transfer happened in the same bank, then the bank may transfer this upon providing only the original transaction record, rather than the above list (this is not applicable at Bank of China, nor at China Construction Bank)

International Credit Cards and ATMs

Credit cards can be used for withdrawing money, shopping and other transactions in most major cities of the country, but generally not accepted in rural areas. Be prepared to pay in cash in smaller shops, cafes and businesses. Note that it can be difficult for foreigners to obtain a Chinese credit card.

You may use your foreign bank cards at a local ATM if your card is covered by the PLUS, Cirrus, MasterCard, Visa or American Express networks. However, in some cities and some branches, this may not be possible. If you wish to use your foreign ATM cards, consult http://www.mastercard.com/atmlocator or http://visa.via.infonow.net/locator/global for suitable ATM locations. Transaction fees may be applied either by the local bank or your home country bank. Withdrawal limits also vary from bank to bank, but are generally between 1,000-3,000 RMB per day.

Note that China Construction Bank is a member of the Global ATM Alliance which allows customers of certain foreign banks to use their bank card at a China Construction Bank ATM without encountering a transaction fee. The list of foreign banks includes BoA, Barclays, BNP Paribas, Deutsche Bank, Scotia Bank, Santander Serfin and Westpac.

Chinese bank cards are all connected to the China UnionPay network which allows you to use any ATM in China as well as certain ATMs in over twenty countries worldwide. For an updated list, see http://en.chinaunionpay.com/englobalization/index.html