In April 2007, HSBC became one of the first international banks to locally incorporate within China, allowing it to offer renminbi banking services. It is the largest foreign bank in China in network and geographic reach, with 63 outlets across 17 cities, including 43 HSBC Premier centers in 15 cities.
HSBC China’s head of personal financial services, Catherine Fok, walked CHINA ECONOMIC REVIEW through the ins and outs of renminbi banking.
Q: What’s the biggest surprise for most foreigners when they begin banking in China?
A: Customers who are familiar with banks in North America, Europe or developed Asian markets might find the Chinese system very different. All of these regions have, to various degrees, embraced universal banking models, in which a bank can be a one-stop service provider offering things such as brokerage, pension and insurance services on top of basic saving and lending. Also, local currency services in China can be very challenging for people who are not able to write Chinese characters. Almost all renminbi payment instruments and orders have to be written in Chinese, so as to get cleared through the local regulatory system. What’s more, foreigners will be surprised to find an astronomic penalties imposed if a check is bounced because of a wrong signature.
Q: How does the renminbi’s being a “non-convertible currency” affect a customer’s banking options?
A: There are regulatory limits to the amount of local currency that can be exchanged by an individual customer, and there are some, albeit fewer, restrictions on converting foreign currency to renminbi for personal use. Foreigners are allowed to freely convert foreign currency up to the equivalent of US$50,000 to renminbi annually, while the exchange back into foreign currency may, in most cases, require supporting documents (like income tax receipts) as required by the foreign exchange regulator. This makes it important for a person working within China, or one who has accepted a position within China, to consider issues such as remittance and foreign exchange in relation to their personal financial situation. Things a person should consider include the outlook for renminbi appreciation and whether they have foreign-currency obligations, such as an overseas mortgage. There are can be advantages or disadvantages to receiving salary in foreign currency or RMB, and these will vary from person to person.
Q: How does one go about getting money into and out of mainland China?
A: There are few restrictions on bringing foreign currency into or out of China, although remittance is still subject to regulations of proper declaration. [After money is deposited in your account], you can withdraw foreign currency cash from notes accounts or exchange accounts by giving two working days’ notice. According to regulations, you can withdraw foreign currency cash from notes accounts or exchange accounts up to a daily accumulated amount of less than US$10,000. Amounts exceeding this require prior approval from the local State Administration of Foreign Exchange office.
Q: What about overseas remittance?
A: Due to foreign exchange regulations in mainland China, expatriates can only convert renminbi into foreign currency and further remit the funds out of China from their legal renminbi incomes. For expatriates, the annual foreign currency-renminbi conversion amount should not exceed US$50,000. There are no restrictions on expatriates receiving foreign currency from overseas and remitting foreign currency funds from their accounts.
Q: What options are available for someone needing to do banking in the mainland as well as Hong Kong and Taiwan?
A: With HSBC Premier service, our global wealth management proposition, customers can take their accounts, credit history and banking relationships with them wherever they choose to live and work, across 36 countries and territories. Premier is a service tailored for international customers, allowing them instant, free access to their registered HSBC accounts held in different countries and territories through a single internet banking login. Customers can make free transfers across their HSBC accounts worldwide. Expats in Hong Kong, Taiwan and mainland China are especially interested in HSBC remittance services, RMB, HKD, USD home mortgage loan services and foreign currency deposits with competitive rates.
