Top 7 Financial Tips for Expats in China

Top 7 Financial Tips for Expats in China
May 18, 2017 By Trey Archer ,

Being away from your homeland has its advantages, but it also most certainly has disadvantages. As a financial advisor, one of the biggest problems I see with foreigners living in China lays in the realm of finance. This isn’t necessarily due to not making enough money – on the contrary many foreigners living here have high salaries with great benefits. Rather, the big problem is managing, growing and protecting the money you make.

In China, you don’t have the NSA, or 401(k)’s, or Superannuations. So, when planning your finances, you’re all on your own with little or no help from China or your motherland. For that reason we present the top seven tips for staying financially secure in China.

1. Wealth Protection

This involves insurance, particularly medical insurance. Once you have created your wealth, the last thing you want to do is loose it. Let’s say you’ve accumulated a bit of money, but then get in a traffic accident or get diagnosed with a severe medical condition. An accident or illness can set you back hundreds of thousands of RMB – especially when using expensive expat hospitals – thus wiping out your savings. But by having just basic inpatient coverage, your insurance provider will cover all the medical bills to help preserve the wealth you’ve amassed.

2. Investing

Just in the way insurance preserves the money you’ve made, investing grows it. Banks in China (and practically all over the world) provide very low interest rates – barley enough to keep up with inflation. Why not invest in funds that grow your hard-earned cash faster? For example, if your investment grows at a rate of 10% per year, due to the magical powers of compound interest you will double your money in just seven years! Furthermore, there are many tax-efficient investments available exclusively for expats.

3. Banking

Remember, all banks in China are controlled by the government. Thus, you may want to be careful with how much money you stash with them. A general rule is don’t store what you can’t afford to lose – it’s definitely not recommended to have your entire savings in one Chinese bank. A better option could be offshore banking. By placing some of your savings offshore in a secure/regulated jurisdiction (while leaving a bit in your Mainland bank for spending money), you can rest assured that your wealth is in a safe place.

4. Currency Transfers

Speaking of banks… There’s enough red tape in Chinese banks to stretch the length of the Great Wall! Getting money out of China can be a treacherous process. But why? Well, the government is limiting capital outflows. For this reason, you can only exchange up to the equivalent of $500 USD per day, while foreigners are only permitted to transfer up to $50,000 per year out of the country (though you’ll need pay slips from your company, ID, and loads of other documents to do this). If you’re looking to convert and/or transfer a lot of money abroad, consider using a professional currency transferring agency. It’s by far the easiest and most efficient way to move money across international borders.

5. Tax Planning

This is especially true for Americans, but also for others who have tax liabilities in their home countries. Americans are subject to report and pay taxes on their income worldwide even if they reside outside of the US. If you’re not reporting your earnings and bank details to the IRS, you can land yourself into some serious trouble and lose all of that money in fines! If you’re a US citizen, or are liable for taxes back home, it’s highly recommended to hire a professional to help file your yearly reports in a legal fashion. It could save you a lot in the long run.

6. Retirement Planning

Most pension funds require that you live in or work in the country of where the retirement fund is domiciled. So, if you’re living in China, it may be impossible to keep that fund growing. If this is the case, did you know you can transfer your pension to a provider that will allow you to not only grow but access your funds outside of your home country? Owners of US-based IRAs and 401(k)’s, and those with British pensions, are just some of the approved pension schemes that can be transferred over. If you don’t transfer your pension, it’ll literally just sit there collecting dust, so get that money which is rightfully yours back into your possession!

7. Investing in Chinese Stocks & Property

Investing in China is not only very tricky due to extreme regulations, it’s also quite risky. In fact, the company I work for does not permit we do any investments in China: property, stocks, bonds… all are off limits. While I personally recommend against investing in China at the moment, there are other companies out there that do focus on Middle Kingdom markets that you could consult with in case you need a bit of ultra-risk in your portfolio.

Before investing here, however, you’ll definitely want to take a few points into consideration.

• China’s property market is clearly in a bubble. Even though it’s been in a bubble for years and it still hasn’t burst, that just makes this scenario even more horrifying. Read this recent Newsweek article on the subject for more.

• Chinese markets were in shambles for much of 2015 and 2016. While many analysts began stating that the worst was over last December, quite the opposite is true today. This Bloomberg article published days ago titled “China’s Stocks are Tumbling Again. Unlike 2015, World Doesn’t Care” explains the larger picture of the Chinese economy.

• Bonds too have seen better days… The risk of default on Chinese bonds have continued to rise, and they’ll probably stay that way as long as China’s debt keeps mounting. Furthermore, China’s inflation spells also bad news for bonds. This Forbes article goes into more detail about its “shady” bond market.

As an expat there are tremendous opportunities to add zeros to your bank account. But if you’re not managing your wealth properly to actively grow and protect your savings, are you truly maximizing your full potential? Play the hand you were dealt like a pro and be sure to follow some of these top tips for financial success in China.

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Keywords: Financial planning for expats Expat financial management in China


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Insurance is good, but foreigners cannot invest in China. Not sure why you would suggest that.

Dec 08, 2017 12:55 Report Abuse



Why bitcoin?

May 31, 2017 17:14 Report Abuse



Go to H.k or S.Korea or Japan or anywhere else and buy bitcoin. Enough said

May 29, 2017 10:45 Report Abuse



I am really interested in learning more investments for foreigners in China. If its not a good idea to invest in China, where specifically should we put our money? The article mentions investments that grow at 10% - where do I find something like that?? Also I'd like yo know details about the investment opportunities exclusively for expats that are mentioned.

May 22, 2017 12:25 Report Abuse



I agree with #1. You should have medical insurance, especially if you are one of the older expats. Although Chinese healthcare is less expensive than the US, it can eat up your savings if you have a serious illness or accident. International healthcare can cost $1500-$2000 annually. As for investing, I also agree that one should not invest their money in China at this point. There are numerous investing opportunities available online through companies like Ameritrade. For me, I simply transfer money into a bank account in the USA. With all my debt paid off, I am currently building an emergency nest egg of $20,000. Once I reach that point, I need to look at investment opportunities for the remaining amount. One thing not mentioned is gold. Do not buy gold in China. I do not think you are permitted to take it out of the country. I could be mistaken on this, but I am not willing to take the chance. Americans are required to file their taxes every year, even if you do not owe anything. You must submit paperwork showing your income and tax liability. I use one of many free online tax programs to have this completed and sent to the IRS. It is a pain in the arse, but I recognize the penalty could be far worse. The online program also submits the other forms required for expats that show that they have lived in their host country for over a year that excludes them from having to pay Obamacare and federal taxes. Many people may scoff at these financial tips, but you are only damaging future is you do. If you are here just for a gap year or two, then you can ignore most of this information (not the taxes though). For those of us here long term, it would be wise to take into consideration the long term financial planning strategies. After all, you would do the same thing back in your home country, so why would it be different in a different country? Money management should not change just because your location has.

May 21, 2017 07:06 Report Abuse



More Shyte, from a Shyte writer

May 19, 2017 14:14 Report Abuse



god, all the information in this article are so wrong... 1. like above, foreigners have no limit for exchanging currency. They have to provide tax payment proof and are free to go 2. Where can I invest with a magical rate of 10% interest? I m pretty sure it has major risks. BTW interest rates of chinese banks is not low and can be around 4%. compared to western banks this is considered very high 3. Banks will not just steal your money LOL paranoid? 4. A company cannot restrict you to invest where ever you want rofl Investments are a private affair and have nothing to do with your company unless you work for the CCP 4.

May 19, 2017 09:05 Report Abuse



USD50,000 a year is for chinese. USD200 for foriegners and unlimited for them with pay slips. Good luck having those because.... China!

May 18, 2017 19:04 Report Abuse