EASC Study Tour 2006
Topic of the Week

Welcome to the "Topic of the Week" series! Each week we will discuss areas of interest or things that need your attention in preparing for the Study Tour to China.

Week 7: Money

It's not possible to purchase Chinese currency outside of China, so you'll have no choice but to wait until you get there to exchange your US$. However, you will be able to exchange money at the hotel upon arrival. In Hong Kong ATMs are everywhere, and you'll probably get a better exchange rate on ATM transactions than exchanging your money at a bank. For all currency exchange transactions except ATMs, you'll need your passport.

Hotel exchange desks in China are open from early morning until late at night seven days a week. There is usually a prominent sign in the lobby, or ask about the hours at the front desk. The exchange rate is the same whether you change money at the hotel or a bank. And they'll speak English at the hotel!

Important Note: Save all receipts from foreign currency transactions in China (including ATM receipts). If you have Chinese yuan left over, you will need these receipts in order to change your money back into dollars or into Hong Kong dollars. No receipts are needed to exchange Hong Kong dollars into another currency.

As an American, things will probably seem very cheap. But keep in mind that a well-paid mid-career university professor in Beijing earns around $200 a month-about three times the salary of the average worker in the capital city.

Currency

China -The official currency is the renminbi, referred to as the yuan. One yuan is divided into 100 fen or 10 jiao (also called mao ). There are 1, 5, 10, 50 and 100 yuan notes, and 1, 2, and 5 jiao coins. There are also 1, 2, and 5 jiao paper notes, which in my experience are used more in the north, while coins are more prevalent in the south. Try to get as many little notes /coins as possible. 100 yuan (a little over $12) is a lot of money in China and it may be difficult for stores to change a bill that large. Some public toilets require a small payment, so it's good to have some of the smaller bills or coins at hand. The renminbi exchange rate doesn't fluctuate much; it's around 8RMB to US$1. (See illustrations of paper currency at http://www.chinatoday.com/fin/mon/ )

Hong Kong - Hong Kong still uses its own currency, the Hong Kong dollar, with paper currency in denominations of HK$20 (grey), HK$50(blue), HK$100(red), HK$500 (brown) and HK$1000 (yellow). Coins are issued in denominations of 10 cents, 20 cents, 50 cents, HK$1, HK$2, HK$5 and HK$10. The currency is issued by different sources, so $100 bills may not all look the same, but they spend the same! The HK$ also does not fluctuate much against the US $; expect about HK$7.7 5 to US$1.

Credit cards

In China, you may be able to use credit cards in large souvenir shops geared toward foreign tourists, but probably only on large purchases. Merchandise is very cheap in China , and it costs Chinese merchants a lot to accept credit cards. In the long run, you will always pay for the privilege of using credit cards. Only expensive restaurants will likely accept credit cards. I wouldn't count on using them except in Hong Kong , where credit card usage is similar to the U.S., or at the Friendship Stores in the PRC.

Check with your credit card issuer to see if they tack on a service charge for purchases in foreign countries. 3% is typical, but there are some that do not add this fee. They won't tell you unless you ask (or unless you read those little disclosure things with the small print that come with your bill from time to time). You usually get a better exchange rate using a credit card.

ATMs

There is ATM access in large cities, but the machines may not be convenient. The farther south we go, the better access will probably be. In Hong Kong there are ATM machines which you can use on nearly every street corner-probably more access than you have in the US. In Shanghai they're quite easy to find in areas where foreigners are likely to go. In Beijing there are some, but they're not as likely to be convenient to where we are. I wouldn't count on being able to access an ATM machine except in Hong Kong. Remember, except in Hong Kong , the locations may not be convenient to where we are. Before you leave the US, you'll probably want to check with your bank to see what they charge for overseas ATM withdrawals.

You can check the websites of the two biggest ATM chains and find their locations. In my experience, many machines will take either card. My survey found the following number of ATMs in these locations:

Visa, Plus network http://visa.via.infonow.net/locator/global/jsp/SearchPage.jsp

MasterCard, Cirrus http://www.mastercard.com/atmlocator/index.jsp

Travelers Checks (TCs)

Travelers Checks in US$ can be exchanged at hotels and banks in China, but you will not be able to use them in stores.

Cash

You will not be able to use US cash for purchases anywhere in China or Hong Kong . US dollars can be exchanged at hotels, banks, and Friendship stores in China, or at banks in Hong Kong . A passport is needed to exchange cash.

In Hong Kong there are also currency exchange businesses all over the place which are open 24/7, but you'll pay dearly for that convenience. ATMs are also open 24/7, making currency exchange booths unnecessary for Americans.

Personal Checks

Personal checks will not be accepted anyplace in China or Hong Kong.

Bargaining

Bargaining is a common practice at street stalls or small shops in the PRC. It's less common in HK, but may still be done in some street markets. There is no bargaining in department, grocery, or other stores where the price is clearly marked. Watch the others around you to see if bargaining is acceptable in a particular location. Have a price in mind that you want to pay for something, and then start much lower. The seller will start higher than his/her target price. Hopefully you'll arrive at a mutually-acceptable middle price.

From National Geographic Traveler China
"Foreigners are often massively overcharged (especially in tourist areas), and bargaining is expected, unless prices are clearly marked. Top-end hotels sometimes sell local wares (such as oil paintings) that you can find for a tenth of the price if you investigate local markets. If the item is unmarked, the seller may quote a price from out of the air. Feel free to haggle, but don't be pushy."

(Anne's note: Sellers in markets frequented by foreigners will have a calculator to aid in the bargaining. The seller will enter his price, then clear the machine for you to enter yours. In 2003 I encountered one vendor whose only English word was "negotiate," which she used when extending the calculator to the prospective buyer.)

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EASC Study Tour 2006 Topic of the Week

Week 7: Money

EASC Study Tour 2006
Topic of the Week