Banking and Good banks in the PRC Discussion
 

I am going to start visiting Mainland China often for business reasons and would like to open a deposit a/c there for the sake of convenience. I would like to be able to withdraw RMB from an RMB account at no charge... preferably at ANY banks ATM or at least the one with the largest network (more ATM terminals) throughout major cities like Shenzhen, Shanghai, and Guangzhou.

I find that I can open a RMB based account with major banks in HKG but that I would not be able to withdraw funds from it using the ATM. I can obviously withdraw RMB in Mainland China but the funds would be debited from a HKD a/c at whatever exchange rate + a fee. I want to hold RMB and be able to withdraw it while in China whenever necessary.

During my research, I found that I can open an account with ICBC (Asia) in HK and at the same time, the bank can actually open a RMB savings account for me with one of their local branches in China. They claim that I can move RMB from my HK based account to my one in China and withdraw it from any of their ATMs while in the Mainland at no charge. Other banks ATM would incur a charge.

Are there other banks I should consider? I notice there are smaller, local community banks in different parts of China. I am also interested in knowing if any PRC banks would issue non-Chinese citizens a China issued credit card? I am a HK resident but not sure if that would make any difference.

ICBC and other banks offer dual currency credit cards but it’s not very appealing as the RMB balance must be paid off in HKD.

BEA offers the same product but it gives you two statement totals, one in RMB and one in HKD… and they allow you to settle HKD a/c using HKD and RMB a/c using RMB. Seems convenient enough for making purchases in the Mainland wherever Union Pay is accepted.

AMEX has China issued cards in partnership with various Chinese banks such as China Merchants and others but all the sites are in Chinese. I don’t know if it would be possible to get one through Global transfer and if that would allow one to actually build some credit history in China.

Any thoughts would be appreciated. Thanks in advance.

Sounds like you need to enter into the PRC with a wad of cash, and open an account with a bank and deposit funds. If you bring in non-RMB, have it changed and hold the account in RMB. Once opened up, you should be able to transfer money in from HKG to the PRC, either in RMB or in HKD to be converted.

Of the major PRC banks, Bank of China and ICBC have the largest presence and network country-wide. They are also the biggest pains in the arse to deal with. Merchants Bank is one of the best of the next tier with good service and decent presence--you might check online (best if you read Chinese) to see their network and whether it suits you. They have expanded a lot in the past 5 years. I dumped my BOC account a few years ago, and now keep a local one at Merchants in RMB only (and another one at HSBC--a "foreign" bank--for multicurrency savings, inward wires, etc). Some people also like Minsheng which is private, but they also have less coverage than the Big Four.

Regardless, it is common practice at many (if not most) PRC banks to give you fee-free access to your cash via ATM only in the city where the account is based--if you withdraw outside that city, even at the same nameplated bank in another city, there will usually be a small flat fee or 1% of the withdrawal. So check before you sign up. It's best to think of Chinese banks as a family of independent fiefdoms, even though they share the same name over the door. Also, different account types have different privileges--if you specifically want ATM capability, make sure that is mentioned as the priority. Many multicurrency savings-type accounts don't allow ATM withdrawals.

Chinese use ATM/debit cards frequently. Make sure you get something on the Union Pay system. Credit cards...not so much except maybe at higher end shopping and accommodation/dining/entertainment establishments. Normally, getting a PRC credit card is not easy or worth the trouble for the casual visitor. If you have strong banking connections in HKG already, try leveraging off of that, maybe you can get some kind of letter of recommendation/reference that will allow you to go to the PRC and get a low-limit card. Maybe go to a PRC bank branch in HKG and ask. But really, I think a local PRC-based credit card is not a necessity--I've lived here for a decade without one and haven't missed a thing.

Thank you for the very informative and detailed reply.

I wonder if by now it would be allowed to open up a RMB account as HSBC in Hong Kong and use it in China. Last time I checked, you had to be a HK resident to do this, but it sure would be a lot more convenient, especially if your trips were mostly to Shanghai.

HSBC is notorious for hit its own members with forex fees on ATM transactions, and their coverage isn't all that stellar, so I'd steer clear of them (or at least not make them a primary option).

I would advise anyone with in the OP's situation to open a Schwab checking account, or an account at any bank that reimburses all ATM fees.

Second, get a BofA checking account, which allows fee free withdrawals at all Construction Bank ATMs (in China and HK). Since Construction Bank is the largest in China, this move alone will get you pretty far.

Then, since you already have Construction Bank covered, open an account at Communications Bank, the third largest. The reason I skipped over Bank of China is that those guys hit you up with fees for ATM withdrawals outside of your home city, which isn't very cool.

I really like Schwab because the checking account can be tied to your credit card (hope you are lucky enough to have one) and your brokerage account, which means you can earn nice interest (by holding securities) most of the time, and free up cash as you need it during your China trips (by selling securities). I try to use my Schwab CC whenever possible as a primary strategy because I like the 2% cash back, but beware of dynamic currency conversion.

I asked about this when I was in HKG last October--still not possible to open an RMB account without a HK ID or residency permit. This was at HSBC Hong Kong, but I think rules are similar at most of the major banks in HKG. It's more a PRC-govt currency control thing driving the regulations rather than the banks themselves.

I would not advocate the periodic traveller to open an HSBC account as the primary local account in the PRC, as it is classified as "foreign" and regulations and retail products offered are different. And their ATM coverage is limited to major cities in the PRC only, and in sporadic locations. Also, many of their account types do not permit ATM access. If the OP is going to be in the PRC frequently and for periods of time exceeding 2-3 weeks at a time, he ought to just open an account directly with one of the Chinese banks, and then have both options of depositing cash directly or wiring funds in (another currency then exchange to RMB). Note to OP: if you ever want to close a PRC account, you usually have to go in person to the place where the account was set up. Some people get around this by not officially closing an account, just withdrawing everything but a tiny amount and leaving.

(PS to Moondog--I use my HSBC USA account to withdraw cash from at ATM's here in China, with no fee and no sandbagging on the official exchange rate, but it is a Premier account which frees one up from a lot of the pesky fees. Also good for fee-free international in-out wires to my other linked HSBC accounts. :D But for local payments like utility bills, debits, additional ATM, etc, it's definitely the local Merchant's Bank RMB account.)

jiejie's post is spot on. If spending extensive time in China requiring lots of banking transactions (e.g ATM's) I'd go for the big four (ICBC, BOC, Agricultural, or China Construction). They are all state sponsored and the best to go with. Each has their own advantages and disadvantages so you'd have to give more criteria to pick between them.

If you are going to be traveling all over Asia, HSBC might be a good alternative. But if mainly focused in China, then go with one of the big 4.

As for Schwab, it's great but they no longer accept applications for the Invest First Visa (2% cash back) but you still might be able to open a checking account with no ATM fees (Invest First Checking).

As jiejie said, remember that there are ATM fees for using the same banks ATMs in different cities (deposit or withdrawal - I previously didn't know why but now do). It's typically only a few RMB, but can add up quick.

From the OP's post, I suggest going with one of the big 4.

Skip the Chinese CC, it's a real hassle to get one and maybe look at a Cap One Card (or HSBC) if that really suits your needs.

It is usually 1% which really adds up. I am with HSBC Shenzhen, and since I hold a premier account there, the fees are waived for all Guangdong ATMs (including non HSBC ones).

try PING AN bank. they are a brand new bank that is trying to get customers thru the NO/LOW fees method. they have a deal for free ATM fees from any other bank and no fees to transfer money to any other bank. VerY attractive

they are also an insurance company which is how they plan to make their money by since you are probably a laowei then u can't buy and they cant sell anyways..

I used CCB (Chinese Construction Bank) in conjunction with my B of A debit card. Their ATMs were easy to find in the city, but there are none at the airport (PVG). I paid no transaction fees or any other add-on fee. I understand they are ubiquitous throughout China. B of A reportedly owns 9% of them.

If you have a Premier home account in the US, you also have the option of opening up a local account on the Mainland. I got offered this during my recent visit to Shanghai and will probably take up the offer next visit.

This thread is now relevant to me because I'm being paid in USD (physical greenbacks) at present, but I charge most of my expenses to US based credit cards.

I visited Citi, HSBC, and Heng Seng today to inquire about USD accounts that permitted online payments to foreign entities. Much to my surprise, I learned: 1) online payments can't go overseas; 2) the minimum balances are really large... $10k for the worst Citi account and $100k for the entry level Heng Seng account.

Based on this lesson, I'm inclined to adhere to the following strategy:

1) stick with my Schwab credit card whenever possible
2) pay it off with Western Union monthly ($10 surcharge)
3) get as much money as possible into my BofA account because of the Construction Bank relationship
4) open a USD/RMB account at one of the Chinese banks (haven't picked one yet)

You will need to be careful what kind of local account you set up, as some types do not have ATM privileges. Get clarification when you are filling out the application.

Actually, I started with a local Beijing HSBC multicurrency account and RMB account here on the mainland, back when HSBC and other foreign banks could offer only limited products here. My US Premier account came several years later, at which time they could link the two (mainland regulations now permitting). I also have linkage with a Premier account in a different Asian country that I find useful. The critical thing for me is free international wire privileges between all accounts with my name on them. And I can do it online. In foreign currency, of course (RMB out is a no-no without special permission and paperwork). And an overseas-based HSBC account pulling money out of an HSBC ATM here (or anywhere else in the world I've found), incurs no fees for a Premier account holder.

I presume you mean being paid in China with physical greenbacks. Yes, one of the peculiarities of China that a lot of readers may not understand for foreign currency is the separation of a "notes" account (physical currency can get deposited and withdrawn from this) and an "exchange" account (which may also go by other terminologies). The exchange account is intended for sending money in and out by electronic/wire means--foreign currency. You can't wire outbound from the notes account though, but you can cash and withdraw currency from the exchange account. You can't deposit physical notes into the exchange account. Confused yet? All this is part of the PRC's grand currency control scheme.

Without some paperwork, contract, tax record data and other mafan, there's not a lot you can do through the official banking system when taking in cash USD and sending it out of China in wire form--especially not in do-it-yourself and cheap online. I don't think you're going to find this any different at the Chinese banks. There's always the old tried-and-true Hong Kong Suitcase Strategy, cart your USD wad down in a suitcase, open an account there, deposit and wire back to US. But this gets unwieldy if you need to make a special trip down there more than once every 3-4 months or if the amounts are not large enough to justify the trip. Or the Friends Network--if you have a trusted US friend with US bank accounts, give him hard cash and you get a check or wire or ACH (US bank to US bank) from his account to yours in the USA.

You also might consider getting on the Cash bandwagon--convert part of the USD to RMB and pay for all expenses with that, even buying air tickets back to USA with RMB, hotel bills, restaurant, everything. Less charged on the credit card keeps the amount of USD needed for repayment down. Over the years, I've almost never used my US credit cards for anything in the PRC and just used the cash payment strategy.

If you have an HSBC Premier account, they'll put your foreign currency notes into an exchange account (one that can be wired out) for free. You can then wire that to your linked overseas HSBC account. The daily limit if you set it up beforehand is up to a value equal to RMB200000.

BTW, even at a non-HSBC bank you should be able to wire out foreign bank notes, with a fee. The usual surcharge for wiring physical currency is about 3% on top of what you would normally pay for wiring money overseas.

There is still the problem of actually depositing cash at a Chinese bank branch, including the HSBC. According to regulations, you're limited to depositing US$5000 or equivalent in foreign currency notes per day, unless you can show the source of the bank notes. This is presumably to stymie the foreign exchange black market.

If whoever is paying you happens to be withdrawing the cash from a local bank branch, then as long as you can get the withdrawl slip from them you can deposit the cash with no daily limit. This is why black market operators (huangniu) usually do the transaction with you at a bank branch. That way they can simply withdraw the foreign currency notes directly from the bank with a slip in hand.