Banking, Money and Taxes in China

Banking, money, and taxes are easily manageable in China, with various local and international options available.

The language barrier may present challenges, but many organisations have service options in English. If things become complicated, it's also easy to employ the expertise of a translator or enlist a Chinese friend.

Money in China

The official currency of China is the Renminbi (RMB or CNY). It’s often referred to as the Yuan or Kuài, an informal word for money. One renminbi is equal to 100 fen or 10 jiao. 

• Notes: 1 RMB, 5 RMB, 10 RMB, 20 RMB, 50 RMB, 100 RMB
• Coins: 1 jiao, 5 jiao, and 1 RMB

Banking in China

With many local and international banks to choose from, there are plenty of options when it comes to banking in China. The most popular local banks include Bank of China, China Construction Bank, Industrial and Commercial Bank of China and the Agricultural Bank of China, while international offerings include HSBC and Standard Chartered, among others.

Some expats, especially those who plan to stay in China only for a short while, prefer offshore accounts, even though these carry hefty transaction fees.

Opening a bank account

Opening a bank account in China is usually straightforward. Depending on your needs, you can pick from international or local banks, each with its own advantages and disadvantages.

If you already have an account with an international bank, you may prefer to use them. While this might the most convenient option, keep in mind that ATMs might be hard to find, especially in smaller cities.

To open a basic bank account, you'll typically need your passport and a small initial deposit. Some banks may also ask for a copy of your visa or proof of residence. It's a good idea to have your Chinese phone number set up for verification and communication with the bank. Some branches might also ask for your taxpayer identification number, so make sure to have this information ready.

The language barrier can be tricky, as most banking information is in Chinese. If you don’t speak the language, you may need help with translations. It's often best to find a branch near your home or workplace with English-speaking staff to assist you with complex queries.

ATMs and credit cards

Taxes in China

If you’re an expat in China, your taxes will depend on whether you’re considered a tax resident or not. You’re a tax resident if you live in China for at least 183 days in a tax year (from 1 January to 31 December). 

As a tax resident, you’ll need to pay taxes on your worldwide income. If you’re not a tax resident, you’ll only pay taxes on the income you earn within China.

China uses a progressive tax system, meaning the more you earn, the higher the tax rate, ranging from 3 percent to 45 percent. Tax rules can change, and the penalties for not following them can be severe, so it’s important to stay updated.

Since tax affairs for expats can be complicated, it’s a good idea to get help from a tax professional. Employers in China often help new employees register for the tax system and usually deduct income taxes from your salary automatically.

Useful links

• State Taxation Administration of the People's Republic of China