i'm positive. 2% fee is not applied to transactions made in china. i have used my card many times in china with the most recent usages in last summer, the foreign transactions are posted onto my statement as the amount in local currency and the amount in us dollars calculated based on the exchange rate, usually u would expect an extra line below telling you how much for the 2% foreign currency charge, but i never see that for purchases made in china. as far as i know, discover has an agreement with unionpay which is the biggest card brand there. cards bearing the unionpay logo are accepted almost all the time in china if the merchant takes credit card, and discover cards are treated just as the same. but sometimes you do need to educate the cashier a little bit by mentioning the word unionpay.