While people coming to China on a short-term corporate contract will want to plan in advance for the repatriation of funds, just about everyone working in China will need to address the issue of taking money out of the country at some point.
China’s renminbi (RMB) is not a fully convertible currency. Though welcome in Hong Kong and many Southeast Asian countries, banks in Europe and North America may not readily accept it for exchange or multi-currency deposits. As such, large sums require special handling.
China strictly regulates the export of funds for both RMB and foreign currencies. While the days of only being able to exchange currency at the airport upon departure are over, dealing with current restrictions still requires a bit of advance planning and strategy.
For people moving to Beijing as executives or with the same employer as in their home country, the currency that the salary is paid in – and where – should be negotiated in advance. In other words, the easiest way to repatriate funds is if they never arrive in China. Though many foreign workers are employed and therefore paid by the Chinese entity – either wholly-owned or joint venture – of their parent company, those sent directly from the home office may be able to receive at least part of their salary in their preferred currency.
For example, one well-known news agency pays its employees most of their income in a foreign currency into a bank account in Hong Kong. It then provides a local “stipend” in RMB for daily expenses and other cash outlay. An award-winning travel company also follows this practice.
These options aren’t available to each expat, but it’s important to look into them prior to a move.
If you’re taking out foreign currency just for travel purposes, be sure to go the exchange desk before your departure. Not every bank branch will have sufficient quantities of foreign currency (or any foreign currency) to complete your transaction. Avoid disappointment by going at least a week in advance.
The official rule is that citizens of the People’s Republic of China are limited to sending USD 50,000 per year. That’s a hard and fast rule for any transfers to be done legally, especially via electronic transfer from a bank in China to an overseas financial institution (Hong Kong is considered overseas for these purposes).
The biggest impediment to exchanging currency – especially transferring currency overseas – will be taxes. In order to send money abroad, a foreign citizen will likely need to prove their employment status and provide receipts to demonstrate that tax has been paid on that income, depending on the value of the transfer. While it shouldn’t be difficult for the legitimately employed, people working gray-market jobs may find themselves in a bind.
Moving Small Amounts
The simplest solution is to exchange funds with people who need RMB, such as new arrivals. The rate will likely be favorable and the only obstacle will be how much the other person has or wants to exchange.
Other options for moving small amounts of money include sending the funds via Western Union, although the fees for this are relatively high given the total transferred. Western Union outlets can be found at just about any China Post office or branch of China Agricultural Bank.
Exchanging money at foreign exchange counters in airports or banks is possible, though again the commission will be rather high and foreign citizens are limited to RMB 3,000 per day. Some users have claimed to have successfully transferred money via PayPal, but this is not proven and would violate PayPal’s current terms of service. Alipay does not currently permit RMB to be sent to foreign bank accounts.
Moving Larger Amounts
Aside from the abovementioned methods, there are other legal means to take Chinese currency out of the country. Each person is allowed to carry RMB 20,000 for travel purposes; RMB 10,000 fits nicely inside each pocket of a men’s sport jacket or suit jacket and will not attract attention from security personnel. Money packed in carry-on luggage or in checked may or may not be noticed. Carrying more than RMB 20,000 may result in the confiscation of the entire amount. However, more can be spread among a group of people, as long as one person doesn’t carry more than the designated amount.
The other way is to purchase something of value that may be readily resold for the same amount of money, such as gold. You may also purchase an item on behalf of someone living outside of China (such as artwork), who would then repay you in a foreign currency. In both cases, the transport of those items to a destination outside the mainland would be required, which carries with it its own set of complications. For example, any object manufactured before 1911 is considered an antique and requires special permission to be exported, so it’s probably wise to exclude the purchasing and reselling of antiques as part of your plan.
Photo courtesy of Epsos.de (flickr)