About Remitting Money to China

When we were students, many of us received remittances from China. After we start working, it becomes our turn to give back to our families. Choosing a convenient, fast, and cost-effective way to send some money to our parents during the holidays can be very comforting for them. If the family needs money urgently, you can also help out. In any case, it is still a good idea to set up a familiar and reliable way to remit money from the US to China so you are prepared when needed.

So in this article, we’ll compare several common ways to remit money to China, so you can choose the one that works best for you.

Remittance Policy

International remittance is a transfer service offered by Bank of China for sending money to banks around the world. Supported currencies include USD and EUR. If you need to use another currency, you can exchange the remitted currency locally after the money is received. For example, if you remit USD to mainland China through international remittance and later need to convert it to RMB, you can usually do so at the receiving bank, often through the bank’s electronic channels such as online banking or mobile banking.

Annual USD 50,000 Foreign-Exchange Quota

According to China’s foreign-exchange policies, foreign currency remitted to mainland China can only be converted into RMB up to the equivalent of USD 50,000 per person per year; any excess must remain in the domestic account in foreign currency. In other words, there is no limit on sending foreign currency into China, but there is an annual USD 50,000 limit on converting foreign currency into RMB. Note that remittance amounts through multiple channels need to be added together, and the total cannot exceed the equivalent of USD 50,000. Some channels may appear to pay out RMB, but the platform has already exchanged the funds and then transferred them to your bank account, which still uses up your foreign-exchange quota. For example, if you send $10,000 through Western Union and receive RMB 64,000, that $10,000 has already used up part of your foreign-exchange quota. If you then send another $20,000 through Wise in an equivalent amount of euros and receive RMB 128,000, that $20,000 also counts toward your foreign-exchange quota.

The following situations do not count against your foreign-exchange quota:

  • Foreign-currency exchange and settlement conducted through foreign-currency exchange points;
  • Settlement of amounts below the equivalent of USD 100 (inclusive of USD 100), such as rounding out balances at bank counters or settling accrued interest;
  • Domestic spending settlement with foreign-currency cards;
  • Withdrawing RMB cash through self-service banking equipment using overseas cards;
  • Using domestic cards overseas and buying foreign exchange to repay the balance.

When the bank staff process your RMB conversion, they can check your year-to-date conversion status in the system. If you have exceeded the limit, the money must either be returned, held until next year for conversion, or converted only after you provide the required supporting documents.

Exceeding the Settlement Limit

So as an individual in China, is there any way to exceed the annual total limit for RMB conversion? For foreign currency that is to be converted and is classified as a non-business remittance under current-account items, the bank may process it with the customer’s valid ID and the following supporting documents; if someone else is authorized to handle it on your behalf, the bank may process it with valid ID documents for both the principal and the agent, the principal’s authorization letter, and the following supporting documents:

  • Gifts: notarized gift agreement or contract; the gift must comply with national regulations;
  • Family support payments: proof of direct family relationship or notarized proof of a support relationship, plus proof of the overseas payer’s income, such as bank deposit certificates or personal income tax payment records;
  • Inheritance income: legal documents or notarized certificates related to the inheritance;
  • Insurance foreign-exchange income: insurance contract and proof of payment from the insurance institution; foreign-exchange insurance must comply with national regulations;
  • Income from the use of proprietary rights and franchise fees: proof of payment, agreement, or contract;
  • Income from legal, accounting, consulting, and public relations services: proof of payment, agreement, or contract;
  • Employee compensation: employment contract and proof of income;
  • Overseas investment income: foreign-exchange registration documents for the overseas investment, profit distribution resolution, dividend payment notice, or other proof of income;
  • Other: relevant supporting documents and payment vouchers.

In other words, as long as the source is legitimate, you can convert more than the USD 50,000 limit. You just need to provide the relevant proof to the bank; otherwise, the money may be stuck there in foreign-currency form, and the bank may contact you to have the remittance returned.

Bank Wire Transfer

Bank wire transfer is the most common remittance method. Its biggest advantages are fast arrival and the ability to send relatively large amounts. We can initiate an international transfer directly from a US bank. Wire transfers are more suitable for urgent transfers and larger amounts, because the base fee is relatively high and the process is more cumbersome, so they are not recommended for small remittances. Here, we’ll use a transfer from BofA to Bank of China as a simple example.

Sending Bank

  • Find the wire transfer page in BofA
  • Add the sender and the receiving currency, and choose international for an international transfer. If you choose to send USD, the receiving bank may keep the funds in USD if it supports dual-currency accounts; otherwise, it may automatically convert the money to RMB according to the bank’s exchange rate (the official exchange rate is usually not bad). If you choose to receive RMB, the exchange rate will be based on the US bank’s rate (which is usually not very favorable). Since RMB is not an international settlement currency, the money will first be converted to USD for the wire transfer and then converted back to RMB at the domestic bank. That means two currency conversions, which can result in significant losses, up to 10% or more, and many people have already run into this. My advice is to send USD and let the Chinese receiving bank handle automatic or manual conversion.
  • Fill in the recipient information
  • Then choose the corresponding receiving bank. One way is to call the branch or sub-branch of the receiving bank and look up the corresponding SWIFT code; be sure to specify that you want to receive USD remittance. Another way is to directly choose the bank or branch address from the list provided by BofA and then fill in the account number, which is the most convenient option. If the bank is not on the list, please check with the domestic bank to see whether you can use the nearest bank listed.
  • Then you can select the person to send the transfer to, enter the amount, and make sure you are sending USD. After the transfer is submitted, you may need to verify your identity, and the bank may call you, so keep your phone reachable.

Receiving Bank

The receiving bank side is relatively simple. If this is your first time receiving a transfer from the US, you may get a prompt saying you need to go to the bank to convert the funds, or select the source and purpose of the money in the bank app before you can convert it. The conversion is based on the bank’s USD-to-RMB exchange rate, which is usually normal.

The receiving bank also charges a fee for incoming remittances. Here we’ll use Bank of China as an example. The fees are split into a handling fee and a telegraphic fee. Bank of China itself does not charge a telegraphic fee, while other banks charge a $15 telegraphic fee. The handling fee has three tiers: 9 / 15 / 0.15%.

If you have already converted more than USD 50,000 in the current year, you will likely need to submit the relevant documents at the bank before you can convert the funds.

Fees

There are several types of fees involved in remitting money from the US to China. Here’s a summary:

  • US sending bank fee: varies by bank; BofA charges $45 per transfer
  • US sending bank currency conversion fee: if you send USD, this is $0
  • Intermediary bank fee: if the US bank and the Chinese bank cannot settle directly, an intermediary bank is needed to process the transaction. This can result in a $15-$40 intermediary bank fee
  • China receiving bank fees: Fees vary by bank. For Bank of China, the fees are tiered at 9/15/0.15%, with no wire fee (other banks all charge an extra $15)
  • FX conversion by the receiving bank in China: There is no fee here; the only cost is the exchange-rate loss when converting USD to RMB

International wire transfer fees at common U.S. banks are as follows

  • BofA: $0 sent in foreign currency; $45 sent in U.S. dollars
  • Chase: $5 sent in foreign currency (or $0 for transfers of $5,000 or more) ; $40 (or $50, with banker assistance) sent in U.S. dollars
  • Citi Bank: $35
  • Fidelity:Up to 3% of amount in foreign currency; $0 sent in U.S. dollars
  • US Bank: $50

Notes

  • Be sure to send USD! Sending RMB will get you badly ripped off
  • Be sure to enter the recipient's identity information correctly; if it doesn't match, the transfer may be returned (the fee definitely won't be refunded)
  • Before sending, contact the receiving bank in China to see whether any additional documents are required. If the money still hasn't arrived after you've sent it, proactively contact the bank to ask

Remittance platforms

A remittance platform is an intermediary between a U.S. bank and a Chinese bank. It usually converts USD directly into RMB and deposits it into your Chinese bank account. It's also fairly convenient to use, and the amount of RMB you'll receive is shown upfront. Remittance platforms are mainly for small- to medium-sized transfers, require fewer verification documents, and are fairly fast. Some platforms also support transfers to WeChat or Alipay (to the linked bank card). Fees are lower for smaller transfers, but for larger transfers they are not as cost-effective as bank wires.

Western Union, Wise, and Remitly, which we introduced earlier, are all remittance platforms. I've used all three, and they've all been pretty good. A brief comparison is below

Comparison of International Money Transfer Platforms

Platform Delivery Time Fees Receiving Method Limits Quick Take Sign-Up Bonus
LemFi Real-time $5.98 for transfers above 100, $6.98 below Alipay, WeChat, UnionPay card Up to $4,000 per transfer

Up to $8,000 per day

 High security, Chinese-language customer service, generous sign-up bonus Get $20
Remitly Real-time to 4 business days None (under $1,000, $2.99 per transfer) Alipay, WeChat, UnionPay card $2,999/day, $10,000/month, can be increased Fast delivery, no ID verification required, exchange rate is average Get $10
Panda Remit Real-time to 3 business days ACH $2.99-$6.99, Debit 0.8% Alipay, WeChat, UnionPay card $3,000/transfer, $9,000/day Good exchange rates, very low overall fees, user-friendly interface, smooth experience, solid Chinese-language support First transfer fee waived + better exchange rate
Western Union Real-time to 4 business days $0-$2.99 per transfer Alipay, UnionPay card $2,500 or $7,000/transfer Fast delivery, currently no fee for Alipay transfers, exchange rate is average Get a $20 Amazon gift card
Wise 1 hour to 2 business days Debit ($1.27+2.20%), ACH ($1.27+1.22%), Wire ($5.41+1.06%) Alipay, UnionPay card ￥3.1W or ￥5W/transfer, $10,000/day Comprehensive features, supports many currencies, transparent fees Get $600 in fee-free transfers

Other

I haven't personally tried the other platforms in detail; feel free to discuss them in the comments

  • WorldRemit: A complaint here—after I submitted a transfer, they emailed me asking me to upload my ID. But the link in the email was literally a non-clickable <link>, which was ridiculous. After I finally found where to upload my ID and uploaded it, there was still no response. The transfer had already been charged, but I still couldn't cancel it. It was just beyond frustrating.
  • Xoom: A PayPal product. They kept emailing me saying I’d get a reward if I signed up and made a transfer. After I spent a long time submitting the remittance, they told me it was high risk and canceled my transfer...
  • Swapsy: In essence, it connects two individuals to exchange currency. The U.S. side uses Zelle for transfers, and RMB side transfers are made via WeChat or Alipay. It is a newer option, but you really shouldn't move too large an amount, since the platform can't guarantee or compensate for losses. Even though identity verification is required, the risk is still very high.

Other

The following options technically aren't remittances anymore, but they are other ways to move money to China that many people are familiar with. Here's a brief overview.

  • No-fee ATM cards: U.S. banks like Schwab and Fidelity offer ATM cards with global ATM fee rebates. If you expect to send money to China regularly, you might consider getting one and leaving it with family in China for direct cash withdrawals; in theory, it doesn't count against foreign exchange limits. Of course, if the card gets flagged by fraud controls or is stolen/used fraudulently, dealing with that across borders can be pretty troublesome
  • Traveler's checks: I haven't tried them myself. Supposedly the fees are extremely low, and they're suitable for moving large amounts. But cashing them in China requires collection and so on; reportedly it takes about a month, which is very inconvenient.
  • Mailing checks: A U.S. bank can mail a check to an address in China, and then you take the check to a bank to have it collected. Mailing plus collection—just thinking about it tells you it would take a long time, and it's easy to lose
  • Exchanging money: The range here is huge. If you find a trustworthy friend, you can help each other out. I strongly advise against exchanging money with strangers online; if you get scammed, it's basically impossible to get the money back. If you do exchange, cash in exchange for a Chinese bank transfer is best (it's harder to reverse). Still, I don't recommend starting to exchange large amounts after just a few messages.

Conclusion

The ways to send money from the U.S. to China are fairly standard: for large amounts, consider a bank wire; for small amounts, use a remittance platform. My advice is to consider risk first, convenience second, and fees last. Once a transfer runs into problems, the time cost is very high. I also recommend settling on a remittance method you're comfortable with and trying a small transfer once, so you'll have it ready when you need it.