Exchanging Money in China
Dollars & Yuan
The official name for the currency in China is Renminbi (abbreviated as RMB, the "people's money") with denominations of the yuan, jiao, and fen, which bear a relationship to each other somewhat like the U.S. dollar, dime, and penny. In southern part of China, coins are favored by locals especially when taking public bus, taxi, or as changes from store, whereas in northern part of China, people like paper money better. Because of the inflation in the last few years, paper money for jiao and fen worth very little now, and almost out of the market.
RMB is not traded on international markets and can be officially purchased or exchanged only in China. Foreign currencies and traveler's checks may be converted to RMB at hotels. The rate of currency exchange is the same everywhere in China. The Aug of 2008 rate of currency exchange was around 6.70 yuan = US$1. For example, if an item costs 10 yuan RMB, it will be equivalent to almost US$1.50; This is calculated by dividing 10 by 6.70. See conversion table. Most accurate exchange rate is available on the website of Bank of China: http://www.boc.cn/en/index.html
Your first opportunity to exchange your money for Chinese yuan will be at your first hotel. In the airport, usually the exchange rate or the service charge is not favorable to you. In the city, the exchange rate will be same in the hotel, in the bank or in souvenir stores.
It is wise to carry some U.S. cash in $1, $5, $10, and $20 denominations as this can be a plus when buying from street vendors and giving out as tips.
Most souvenir stores accept credit card payment.
Most stores at tourist stops accept U.S. dollars.
The Chinese currency is currently fixed to the value of the US Dollar, so as the value of US Dollar changes on international currency market, the relationship between the Chinese Renminbi and the US Dollar remain the same. Some countries say that this does not give a true indication of the strength of the Chinese currency internationally and there is pressure on China to change the current relationship to the US Dollar.
ATM machines are widely available in China set up by different banks, on the street, in hotels, shopping centers or by the door of banks. You have to bring with you the PIN number as most ATM machines request you inputting this security code. Usually 3% will be charged if you are to cash your credit card on ATM machine. ( It could be higher if you do it in the airport. In the city, the rate is the same.)
It is not recommended that you carry traveler's checks. Only in super deluxe hotels and banks, they do exchange traveller's checks for you. In most local hotels they do not exchange traveller's checks. There is a service fee for changing traveller's checks whereas there is no service fee for changing cash. Vendors will not accept traveller's checks.
Major credit cards are accepted at all hotels, tourist stores, restaurants, and factory outlets in China. Be sure to record your account numbers (and customer service telephone numbers) in case you lose your credit cards. Discover & American Express can be iffy, but visa/mastercard are accepted everywhere credit cards are taken.
Make major purchases by credit card. You will get a good exchange rate, the protection of the card's charge-back provisions, and often an extra guarantee on your purchase.
It is recommended that you take a credit card or two and some cash for purchases from street vendors for food or gifts/personal items from small vendors. You'll have no difficulty exchanging cash at the hotel, but if you can, bring new bills or bills in very good condition. They reject bills that are bent or old. It is also recommended you exchange money daily as you expect to need it. Use up your Chinese bills or use them up as tips, because your conversion rate at the airport is very low.
Before you take a credit card, contact the card issuer and inform them you will be using the card in China. Otherwise, you're likely to find purchases disallowed because of security protection. Different card issuers have different foreign conversion rate charges; some will not charge, others charge up to 3% on average. Even with the additional charge, because the conversion rate is better from credit cards, you more or less break even.
Money Wire Transfer
Wire Transfer using a service called Money Transfer is available and is a joint venture between the China Courier Service Corporation and Western Union. This service allows instant money wiring to and from 100 countries.
Although the Government is trying to eradicate this practice there are still some problems with the use of counterfeit money, although the problem is decreasing. It is very common practice for those who are receiving money to check its authenticity. Do not be offended by this practice. It is not a reflection on your character.
Foreign currencies may be converted into RMB at all banks, bank branches or hotels at the exchange rate quoted on the foreign exchange marker on the day.
Black market in foreign currency is forbidden in China. People may approach you in front of hotels, at tourist spots or at banks for a black market exchange. You should be extremely careful. The exchange rate may be attractive--higher than the bank rate--but it is illegal and you risk being cheated. Sometimes these peopldon't give you the right amount, since you don't have time to count the money or, even worse, they may give you fake notes or a bundle of plain paper with a few notes on the top.
When you exchange money at the banks, you should ask for a certificate, with which you can change RMB back to foreign currency when you leave the country.
The Bank of China is the bank which specializes in handing credit cards issued in foreign countries. They include Visa, MasterCard, Diner's Card, American Express, JCB, Million Card and Federal Card.
These cards can be used at major hotels and shopping centres where the Bank of China has branches. In the event that you lose your card, you should report to one of the branches of the Bank of China and apply for a replacement.
The Bank of China has an agreement with foreign financial organizations on selling, cashing in and compensating for travelers' cheques.
The official exchange rate at this time is 6.829 yuan to 1 U.S dollar. Keep the receipt of the transaction as you might need when you leave China to change your US dollars back in Bank of China at the airport.
Note: The Exchange Rates of RMB against the US Dollar and other currencies are fluctuating frequently due to the changing world financial situation. Please check the exchange rate before you pay.
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