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Money questions for extended time in China
Old 04-18-2016, 10:45 AM   #1
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Money questions for extended time in China

Has anyone here lived in China for an extended period? Not sure if these are "Travel" questions or "Money" questions, but here goes.

DD has finished college and is signing up to teach English in Shanghai, China for two years starting this August. She gets room & board paid, and a modest stipend for other expenses. She is working & saving money now to have funds for more travel while she is there. She has some travel experience including 6 months in South Africa, 2 months in France & Spain, and some time in Mexico.

Our questions are about accessing money safely from her Fidelity accounts in the US:

We've heard that in China most daily transactions are cash not debit or credit card. Is this still correct?

Should she get an account at a Chinese bank? If so, any helpful advice on how and where to do this?

Is transferring money from the US to an account there as easy as ACH transfers within the US?

We've heard horror stories about cyber security (or lack of) for electronic communications in China. Suggestions for keeping secure & avoiding fraud?

Any other helpful advice? This is our only child so we worry a lot, and our international travel experience is limited to Europe and Mexico. Support from the employment agency seems spotty at best.
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Old 04-18-2016, 11:18 AM   #2
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What a wonderful opportunity for your daughter! My advice here is based on living in Europe for 4 years in the 90's as well as having visited China 5 years ago, so take it with a few grains of salt.

I would say that since her room and board is paid for, she won't be having a lot of routine bills to pay so she may not need a local bank account. I understand that the new US banking rules are making it harder for expats to open local accounts also (and it was not easy for us to open one in Germany in 1995).

Shanghai is a very modern city and many places take plastic. Obviously she will want cards with no foreign transaction surcharges. ATMs are everywhere, so as long as Fidelity has an arrangement with one of the large Chinese banks so she doesn't get a surcharge every time she withdraws cash, that should work.

The one thing that could be a problem is her stipend - not sure how she would be paid and if she needs a local account for that.

Not sure what to advise regarding cybersecurity - my understanding is that the government monitors/censors what people post but I don't know that financial transactions using HTTPS would be any more vulnerable in general.

Hope she has a wonderful experience!
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Old 04-18-2016, 09:46 PM   #3
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Had not thought about the payroll check cashing / depositing question. We may be overly worried, but we don't expect to ever get over that. "Helicopter parents", that's us.
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Old 04-18-2016, 10:05 PM   #4
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Use her passport to open an account at one of the big Chinese banks, all are government owned and safe. She will get a bank card to get cash from ATM machines.

Most places in China do not accept credit cards or debit cards (or will have a surcharge), especially those that are issued by foreign banks, unless at high end hotels or restaurants or department stores. However, many stores can charge the bank cards (similar to U.S. debit cards) from Chinese banks.

In major China cities like Shanghai, housing is the most expensive part. If that is taken care of, everyone else is cheap if you are willing to live like ordinary Chinese people. However, if you want to have a living standard like in the U.S. it is much more expensive than actually living in the U.S. (I have said this many times for those who think they will save money by living in Asia like a king).

For transferring money, you can use electronic bank transfer. I have not used online transfer.
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Old 04-19-2016, 12:30 AM   #5
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Go Curry Cracker has some experience at living abroad and managing/accessing money while overseas. This post on money management has some good, practical suggestions on accessing money while living outside the U.S. Like OP, GCC uses Fidelity for banking. They seem to highly recommend Fidelity for ease of use overseas.

The linked post is a couple of years old. In it GCC says that Fidelity reimburses all ATM fees worldwide, but more recently I've looked in to opening a Fidelity account, and their website only says that they will reimburse ATM fees nationwide, i.e., in the U.S. It may be that Fidelity has changed it's policy and GCC is still grandfathered in? Or?

I'd be interested to hear from any board members who also do their banking at Fidelity whether or not they get reimbursed for ATM fees abroad as well as in the U.S.?
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Old 04-19-2016, 06:48 PM   #6
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I've lived in China for 8 years. The Charles Schwab Investor Checking debit card reimburses worldwide ATM fees. Cash is King in China.

I've been to Shanghai recently. We enjoyed the French Concession, but could not stand the Bund.

You mention previous travel for 6 months, which was about the length of my honeymoon period living overseas. Living abroad for extended periods can be very isolating. Learning a little of the language can be an ice breaker for local friends.

Recommend you have her listen to Pimsluer's Mandarin tapes. They have 120 x 30 minute lessons. One a day and she'll be very well off by August.

Heisig's Remember the Hanzi Book 1 can help with learning characters. Gabriel Wyner's Fluent Forever course on Creativelive is great for serious study.

Make sure she gets a visit to Beijiing and Hong Kong. Chiang Mai, Siem Reap, and Kyoto are some of the best places nearby.
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Money questions for extended time in China
Old 04-19-2016, 08:29 PM   #7
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Money questions for extended time in China

My family and I lived off and on overseas since 1992 and most recently lived in China from 2007 til middle of 2015 when I FIREd.

In a modern city like Shanghai it should be no problem to use your USA ATM dollar based card and pull out RMB currency. You can do old school wire transfers (not ACH) but they are a hassle. I lived via USA ATM card for 8 years and never had an issue. It was some times a hassle to pull out cash and hit a daily limit -- took me a few weeks to get enough cash from ATM pulls to buy a new car and buy my Harley, for example but certainly workable...

If she is paid at a local school they will almost certainly require that she open up a local bank account to receive her payroll and she will get an ATM card and can use that. It's on the union pay network usually. Electronic payment through tencent is becoming popular too.

She will want to download the WeChat app. You'll want it too as its a great communication tool.
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Old 04-19-2016, 08:36 PM   #8
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My WellsFargo ATM card worked fine in China to give lots of money whenever I wanted it, so that matches with the experiences of others posting in this thread.
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Old 04-19-2016, 08:54 PM   #9
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I had a son spend a year in Japan (not China). He set up an account with CitiBank in Japan and I converted dollars to Yen using Forex and had my brokerage wire it to his bank. Not a real problem.
I'd expect China to be similar.
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Old 04-20-2016, 03:21 AM   #10
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Japan and China. Like comparing grapefruit to bananas.

China's currency is controlled. Japan's is not.

Foreign exchange regulation is entirely different.

There are maximum fx conversion limits in China, etc

The banking networks are entirely different too.

From my view, Not similar at all.

I've lived in both countries for extended periods (years) and so speak with banking and cash management experience on both places.
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Old 04-20-2016, 04:49 AM   #11
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Originally Posted by papadad111 View Post
Japan and China. Like comparing grapefruit to bananas.

China's currency is controlled. Japan's is not.

Foreign exchange regulation is entirely different.

There are maximum fx conversion limits in China, etc

The banking networks are entirely different too.

From my view, Not similar at all.

I've lived in both countries for extended periods (years) and so speak with banking and cash management experience on both places.
I don't doubt they are different. I did my fx conversion in the US, not overseas. Consider we are talking about small sums of money... spending money for a child who will be working over there for a couple years. Not investing huge amounts.

OP -
Call CitiBank and see if they support retail banking in China. If they do, ask their recommendation an how to work the international transfer of spending money.
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Old 04-20-2016, 11:27 AM   #12
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Originally Posted by bingybear View Post
I don't doubt they are different. I did my fx conversion in the US, not overseas. Consider we are talking about small sums of money... spending money for a child who will be working over there for a couple years. Not investing huge amounts.



OP -

Call CitiBank and see if they support retail banking in China. If they do, ask their recommendation an how to work the international transfer of spending money.


As noted, you are far more likely to just rely on a US ATM card than making wire transfers even for small money. The wire transfer fees for the amounts You are thinking are stupid expensive and it can take 2 -3 weeks for the money to clear the china banking system at best.

Don't bother exchanging money in the USA before travel - The rates are ridiculously in favor of the bank or money changer kiosk owner. Airport ATM is your friend. Especially in Shanghai.

Just open a USA bank account with an ATM card, put dollars in, and withdraw RMB on the other side. Most credit unions and regular banks on the cirrus network will work. Get daughter in the habit of keeping a few thousand RMB cash handy too and then open a local bank account once her work visa and resident permit is approved -- it will probably be required by her place of employment anyway.

Good fun.
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Old 04-21-2016, 08:26 AM   #13
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Originally Posted by papadad111 View Post
As noted, you are far more likely to just rely on a US ATM card than making wire transfers even for small money. The wire transfer fees for the amounts You are thinking are stupid expensive and it can take 2 -3 weeks for the money to clear the china banking system at best.

Don't bother exchanging money in the USA before travel - The rates are ridiculously in favor of the bank or money changer kiosk owner. Airport ATM is your friend. Especially in Shanghai.

Just open a USA bank account with an ATM card, put dollars in, and withdraw RMB on the other side. Most credit unions and regular banks on the cirrus network will work. Get daughter in the habit of keeping a few thousand RMB cash handy too and then open a local bank account once her work visa and resident permit is approved -- it will probably be required by her place of employment anyway.

Good fun.
this is what I got with search for US BANK ATM fees.
Quote:
Fee Type Fee
Bank Teller Cash Advance $3.00
Domestic ATM Withdrawal International ATM Withdrawal Free at U.S. Bank or MoneyPassŪ $2.00 at all others $3.00
Foreign Transaction Fee Up to 3% per transaction
Online Deposit via Credit/Debit Card $2.50
Whether to move a large chunk of money to a bank in the other country is really a personal choice. When my son went for a year we moved a chunk (>$10k) wired. It did take a couple days, cost we free, one benefit of being a Fido PC. For a 2 year trip as noted by the OP, one could see the amount needed could be significant. I converted using forex trading at Fido for the conversion as the rate/cost as most favorable, but is real time priced. I would agree to avoid the money changes in the airports or in tourist areas on either end of the trip.

For travel I do use an ATM card as you suggest, but I use a Schwab bank ATM. No foreign transaction fee, good exchange rates, an if they ATM you use is charges a fixed transaction (ATM) fee... those are reimbursed at the end of the month. With using ATM if that is your choice, understand the fees and exchange rates used. Some that are low fees use less favorable exchange rates.
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Old 04-21-2016, 07:05 PM   #14
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Late to the thread, but I would recommend DD opening a Schwab bank account and using the debit card to access funds while in China. You don't have to have any funds at Schwab in order to open the bank account.

I suspect that she'll be able to pay with cash easily enough and the amount she'll need to withdraw probably won't be high, since it sounds like her core expenses are covered.

Schwab gives you a good exchange rate, doesn't charge for currency conversion and they reimburse ATM withdrawal fees. I've used my debit card in Europe and SE Asia without any problems.

Sounds like a great experience. Hopefully you get to visit.
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