Chinese money

In China the currency is the Renminbi or RMB. The renminbi comprises the yuan, jiao and fen.

1 yuan = 10 jiao, and 1 jiao = 10 fen.

Yuan come in notes in amounts of 1, 2, 5, 10, 20, 50 and 100. Jiao come in notes in amounts of 1, 2 and 5.

Fen are only issued as coins, but you can also get 1 and 5 jiao coins and 1 yuan coins.

When moving to China it’s important to be aware of the fact that the country has some pretty strict regulations when it comes to exchanging foreign currency. This means that if you are being paid in yuan you may find it tricky to convert your wages into an alternative currency even if keep your proof of payment.

Because of the rigid rules surrounding currency exchange there is quite an active black market for the service. Expats are strongly urged not to exchange their money this way. Not only is it illegal but you could end up out of pocket as often fake currencies are used in black market trades. If you need to convert Chinese money then use a trusted currency broker like TorFX. They can legally, reliably and regularly convert your funds into the form you need. Expatriate employment contracts usually specify exactly what percentage of earnings can be exchanged for a foreign currency.

Cost of living

Some assume that the cost of living in China is very low. Whilst that may have been the case in the past it certainly isn’t true of all areas of China now and it greatly depends on what standard of living you expect to enjoy.

The cost of living in urban areas (particularly in the nation’s largest cities) can be very high. Hong Kong, Shanghai and Beijing are among the most expensive cities in the world. Housing, essentials and amenities in these cities can set you back as much, if not more, as they would in London.
The cost of living in rural areas can still be fairly low but often the standard of living in small villages and settlements is below Western expectations.


Over the past couple of decades the banking system in China has gradually been transformed. Until recently the banking system was mainly government owned and government controlled. Lately, in order to become more commercially driven, the market has opened up to include other competitive forms of banking and a variety of financial services. There are now only three banks in China which are still owned by the government with the majority of banks having a mixed ownership. Despite this, because of the activities of the Ministry of Finance, The People’s Bank of China and the China Banking Regulatory Commission, China’s central government has retained significant influence over many banks operations.

Queues in Chinese banks can be rather lengthy and slow so if you need to speak to a cashier allow plenty of time. Generally banking hours are from 9am to 4/5pm on weekdays, though some will close for an hour at lunchtime.

There are some restrictions on banking services in China, such as maximum withdrawal amount. These restrictions can vary from bank to bank so it pays to do your research before opening an account.

Opening a Bank Account

If you decide that you need to open a Chinese bank account then there are several options open to you. The majority of expats use the comprehensive personal and business services of The Bank of China and CITIC Industrial Bank. Standard and Chartered and HSBC (the two main foreign banks operating in the country) are equally popular with expats.

Opening an account should be fairly simple. Generally you must make an appointment with the branch of your choosing and bring a valid visa, passport and proof of address with you when you go. Bear in mind that some banks may expect you to bring other documentation so it’s always a good idea to check what you will need when you make the appointment.

Most banks will issue you with a debit card once you have opened your Chinese account.

In China cash is king and it remains the most popular form of payment. Cheques are only rarely accepted and foreign cheques will usually only be accepted as a form of payment by banks if they are accompanied by collateral.


ATMs are widespread in China’s main cities but they may be more limited in rural areas. ATM facilities in China are the same as those offered in many other nations and include cash withdrawals/deposits, transfers and balance/statement enquiries. If you have a foreign debit card you will need to check its compatibility. Generally foreign Visa cards or Maestro compatible cards can be used in China. Be aware that the majority of ATMs do have a transaction limit and usage fees can be quite high.

Transferring Money

Transferring money to China can be quite costly. If you want to save money your best bet is to seek the advice of a currency broker like TorFX. Not only will they be able to advise you of the best time to transfer your funds but they will secure you the best rate possible and transfer your money between accounts quickly and reliably.


In 2012 China implemented some tax reforms which didn’t go over well with the country’s expat community. Unlike the majority of western nations the amount of Individual Income Tax (or IIT) that an expat must pay is directly proportional to their monthly salary minus a standard reduction of 4,800 RMB.

When it comes to paying IIT expatriates are liable if: they make 120,000 RMB, they earn income from outside China, they earn income from two or more sources within China, or if they receive taxable income which is not withheld by their employer. But any expats left exempt by these conditions will probably be snared by the last – that they must pay IIT if they meet any other special conditions for tax liability.

The following are all considered to be sources of income and are subject to IIT: Salary/wage, leasing or transferring property, subleasing/subcontracting, income from individually owned commercial and industrial households, author’s remuneration, remuneration for labour services, incidental income and royalties.

If payment isn’t made on time the penalty can be as much as five times the original amount. The tax rate itself is also progressive and ranges from a reasonable 3% to a whopping 45%.
Any expats who have resided in China for longer than five years must pay IIT on income accrued worldwide, no matter the source.

As the tax laws change with relative frequency and tax evasion is considered a serious crime in China it really is worthwhile seeking professional advice if you’re at all unsure. There are many international tax consulting companies which specialise in expat needs!