Banking in China can be nothing short of a headache, especially if you’re an expat – long lines, rare English service, and the confusion over paperwork is just the beginning. But the simple fact is that some banks really are better than others. We take a look at China’s “Big Four” state-owned banks – the Industrial and Commercial Bank of China (ICBC), Bank of China (BOC), China Construction Bank (CCB) and the Agricultural Bank of China (ABC) to see how they stack up in terms of prestige, customer service, and online banking services. So while banking in China may never quite feel like a walk in the park, staying informed of your options can make the whole experience just a little less stressful.

The basics

First of all, there are some things that all the banks will require when you open an account with them, as well as a basic procedure you can expect to follow no matter where you go. When you arrive to open an account, all the banks require a valid passport and, if applicable, a residence permit. A minimum of 1 RMB deposit is needed if you are opening an RMB (as opposed to a foreign currency) account. After you have filled out an application form, you will be asked to create your six digit PIN number (which is different from the usual four digit PIN number found elsewhere in the world, such as in the United States). You will then be issued a “passbook” in which you can record your withdrawals and deposits, along with a debit card which you can use at any of the bank’s branch ATM’s in China. Be warned, however, that if you withdraw money from an ATM outside of the city or town in which you opened your account – even if the bank branch is the same – you will be charged a fee of 4 RMB.

Also, a quick word about online banking: Most banks offer online banking, where you can gain access to your account statements, transactions, and account balance. This can be a great and convenient form of banking – if you don’t expect too much. Expats often wonder why their online banking service doesn’t cover foreign currency and bank-to-(overseas) bank transfers. Well, unfortunately, you can get the best bank in China and this whole process will still be impossible. Why? You cannot convert RMB directly to a foreign currency through online banking. Period. Nor can you send RMB out of China directly.

If you wish to transfer RMB from China into an overseas account, you will have to physically go to a bank branch (all of the banks discussed below offer this service) with your passport, your work permit and a contract from your employer vouching your employment and income. You will also need a letter on your company’s letterhead (and with your company’s stamp) verifying the taxes that you have paid on your income. This is a mandatory requirement, as you are not allowed to transfer any Chinese income for which you haven’t been taxed. In addition, you must bring your monthly pay slips, with your company stamp and government issued tax receipts. All of this is just to change your RMB into foreign currency. Next you will have to actually wire the money to your foreign bank, which is a lot easier – just provide the foreign bank’s details, including its routing number and your account number. This service will cost you some money (around 200vRMB) and take some time, but hey – nothing in life (or China) is easy!

Another big issue expats have is finding banks that offer English service. Unfortunately, it’s simply a “hit-or-miss” situation, with a vast majority of “misses.” The best thing to do is get a Chinese friend or co-worker to come with you and explain the process. Once you’ve done the same transactions a couple of times, you’ll know which documents you need and which forms to fill out.

1) Industrial and Commercial Bank of China (ICBC)
Of the Big Four branches, the Industrial and Commerical Bank of China is the most popular choice when considering customer service and online banking. The word most often used to describe their website is “streamlined,” although personally I have found that Bank of China’s website is not too far behind. The website has full English text, although the wording can get a bit convoluted (for example, a FAQ question asks: “Can we realize the functions that staff of ministry of personnel submit payroll payment orders and the finance director is not able to view details of the payment via Corporate Internet Banking?” Um, what?). You are able to do the usual online activities, however, including paying bills online and viewing your account balance.

Founded in 1984, ICBC is the largest of China’s state-owned banks with assets of over 11 trillion RMB in 2009. You shouldn’t have a problem finding an ATM outlet, even if you’re traveling outside of China, as there are over 18,000 mainland branches and 106 overseas branches.

Opening an account for foreign currency is never an easy task here in China, but ICBC has some of the strictest rules of the Big Four banks. To do so, you must bring your passport and, if applicable, your residency permit. You must also bring a notarized translation of your English name into Chinese, and fill out a basic application form. The bank will then open the account under your officially approved Chinese name. Keep in mind that there is a minimum deposit for opening an account for foreign currency. For example, to open a USD bank account, you are required to put in at least $300USD.

2) Bank of China (BOC)
Another popular choice is Bank of China, which happens to be China’s oldest bank (founded in 1912). The website is relatively clear and concise, without the gluttony of flashing ads and random-facts clutter that abound on most of the other banks’ websites. This is the bank linked to The Great Wall debit or credit card, signs for which you will see in many institutions around the country. Customer service tends to get slightly lower marks for this bank, although I’ve never heard any legitimate complaints beyond the usual “Banking in China is horrible.”

As of 2010, BOC is the top lender in China to individuals with over 6,951 billion RMB in assets. This means that you can find a stand alone ATM or bank branch on practically every street corner. This is one of the best banks to choose if you’re looking for convenience within China. Beware, however, when using BOC overseas. Any money you deposit into the China branch account cannot be accessed in overseas accounts.

To open a foreign currency account with BOC, you need your passport and your residence permit (if applicable). You can then fill out an application, deposit the minimum amount required (for USD accounts, the minimum is currently $500 USD), and voila – you have a foreign currency account!

3) China Construction Bank (CCB)
China Construction Bank gained a major boost when Bank of America bought a 9% stake in 2005. It is currently the second largest bank in the world, which is not too shabby when you consider it was only founded in 1954. For all this, however, you would think their website would be a bit more internationally oriented. While the main online banking page is available in English, when you click on “Online Bank Services” under the “E-Banking” heading, the text switches back to Chinese, with no English language option. This can obviously be a major obstacle if you’re used to doing the majority of your banking online. I imagine that this issue is a pretty big obstacle in CCB not being more popular with expats.

It is fairly easy to find CCB stand alone ATM’s and branches, especially in the major cities. It is, however, a (relatively) smaller operation than, say, ICBC in terms of outlets. Currently, CCB “only” has about 13,629 branches throughout mainland China.

One of the major benefits that CCB has going for it is that it is a member of the “Global ATM Alliance,” which is a “joint venture of several major international banks that allows customers… to use their ATM or check card at another bank within the alliance with no transaction fees when travelling internationally.” According to the CCB website, other members of this Alliance include Bank of America (US), Barclays (UK), BNP Paribas (France), Santander Serfin (Spain and Mexico), Deutsche Bank (Germany), Westpac (Australia and NZ), and Scotiabank (Canada). This means that if you tend to be a world traveler, CCB just might be the most cost efficient choice overall.

4) Agricultural Bank of China (ABC)
The Agricultural Bank of China just recently went public in 2010, but when it did it certainly made a splash – it had the world’s largest initial public offering (IPO) ever. This may be one reason why their website has improved so much in recent years. The English is clear and the pages relatively uncluttered, meaning you won’t want to tear your hair out while trying to navigate the site.

Chances are you’ve run across at least one of these branches or stand alone ATM’s, as ABC has over 24,000 branches. This is a staggering number, especially considering that all these branches are limited only to mainland China, Hong Kong and Singapore. The abundance of ABC’s can be great for those who are living and working mainly in these three places, with little or no travel needs. For those who need a more flexible debit card and who wish to avoid those pesky foreign transaction fees, this may not be the bank for you.

If you want to open a foreign currency account at ABC, the requirements are the same as BOC – simply bring your passport, your residence permit (if you have one), and a completed application form. The minimum deposit requirement here is much less than anywhere else, however. For example, if you’re looking to open a USD account, you only need $100 USD to do so.
 

Related links
How To: Set Up an Online Bank Account in China
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Tips on How to Protect Your Intellectual Property Rights in China

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