ransferring money to China

Living in China but collecting a U.S. paycheck (direct deposited into Vanguard money market funds) does require getting the money over. Here are some of the methods I have been using:

Western Union

Most people use Western Union by bringing cash in person to a local retail presence. As I am overseas, that option is off limits to me. Instead, these kind of transactions usually involve friends and/or relatives sending cash to here and then I write them back a check via online banking. However, I did use Western Union to send money to my brother-in-law in China before flying out. The cost of this service is $14 for up to $2500 and $25 for up to $7000. (Edit, fees have been raised to $17 and $32!)

Western Union does allow using a debit or credit card to send money online but the extra fees make it unappealing when other options are available. (Edit, with the increased fees, WU is now my last choice.)

Wire Transfer

All banks of course have traditional wire transfers -- usually at a cost of $15 to $25 for overseas transfers. There are some options at specific banks to bypass such fees:

Bank of America can send $1500 per wire twice a month to an account holder a China Construction Bank at no charge. (I could find nothing on their website describing this deal but was able to sign up for it a local branch in San Francisco Chinatown.)

Wells Fargo has a similar relationship with Agricultural Bank of China for PMA account holders ($25K assets at Wells Fargo). You can send $1000 per day up to a maximum of $75K a month. I know -- the math does not work out -- if you sent $1000 every bank business day during a month, you could only do roughly $20K per month.

ATM

Just like how some banks of special wire transfer relationships with banks in China, there may be similar relationships for ATMs. From a China Construction Bank ATM, I can withdraw the equivalent of 2000 RMB from my Bank of America checking account. This corresponds to roughly $293 USD.

Cash

If you have cash, you can find local merchants who will convert the money for you. Unfortunately, the exchange rates are not as good.

Check

If time is not an issue, you can write a check off a U.S. bank and deposit it in a China bank. Fees and time to process depends bank-to-bank. From our inquiries, it appears China Construction Bank has both the lowest fee (about $1.50 for a $5000 check) and fastest service (1 month to clear).

Exchange Rates

Exchange rates do vary depending on the institution and method. Here's a rough estimate of what I've been seeing:

* Trading Rate: 6.83

* Wire Transfer, ATM, Check: 6.81

* Western Union: 6.80

* Cash @ Street Merchant: 6.78

In short, the difference between the trading rate is where the merchant/institution is getting their fee (or extra fee in the case of Western Union).

Additional Notes

Foreigners can open bank accounts in China. All you need is your passport. However, receiving wire transfers and depositing checks can be a hassle. You have to fill out reams of forms each transaction -- I did a test transfer of $100 and sat there at the window for 30 minutes signing one form after another. My recommendation is if you have trusted family in China, transfer the money to their accounts. Chinese nationals can get through the process 5 times faster.

China also has a limit of $50K USD received per person annually. Once you hit this limit, you will get USD cash which you then have to find a local vendor to exchange.