I’ve reported before on how much trouble the banking system in China can be. Today, I went to repay my Bank of China credit card only to be asked for my ID and told to fill in some forms. The reason? I was repaying my USD account and first had to purchase USD.
Some basic background: due to foreign currency restrictions in China there is no free flow of currency in or out of China. Each person has a USD$50,000 limit they can use annually for purchase/sale of foreign currency. Therefore, purchase of USD would generally require registration with SAFE (国家外汇管理局). Many credit cards issued in China have statements separated into RMB and a foreign currency (usually USD) – all foreign purchases are converted and invoiced here. The “foreign” portion of the card works like any credit card overseas.
Typically, my credit card is repaid through direct debit. Once setup, I need do nothing apart from ensuring I have sufficient funds monthly, and both “accounts” (RMB and USD) are repaid automatically. USD repayments here fall outside of the USD$50K annual limit. Apparently telephone instruction are also outside of the limit. Going in person to the bank, however, requires you to carry out the foreign currency purchase procedure – which is troublesome and uses your quota.
- all for a matter of US$20, in my case.
This inconsistency appears to be a fault in logic for me. Despite the forex restrictions in place, there are so many ways to escape it – purchases abroad and repayment through direct debit being one. ATM withdrawal using foreign card is another. For those looking to get larger amounts of RMB into China, you can consider an RMB account in Hong Kong: you can purchase 20,000RMB daily and transfer 80,000RMB per batch to China with scrutiny. Then of course, there’s the underground banks – extremely fast and efficient.
While on the topic of banking restrictions… why can I replace a passbook in any BOC branch but to replace ATM card I must return to the opening branch? why, why?
They really don’t like to make things easy here.