Doing Business in China For Dummies®

Choosing a Bank for Your Business

When choosing a bank for your business (and possibly personal) accounts, you can choose between a foreign bank and a Chinese bank. In a major city, you can usually find branches of foreign banks. Forgetting any other factors, such as financing, foreign banks are generally considered to offer better service than Chinese banks do, though the costs are higher. Foreign banks also have fewer branches, so they may not be very convenient. And there are limitations (that vary by bank) on how much RMB business they can do. Depending on your needs and preferences, you may end up banking with both a foreign bank and a Chinese bank.

A number of Chinese banks offer good service — some say even better than the service at foreign banks. They’re usually the small- to medium-size Chinese banks, such as China Merchants Bank (CMB). Major Chinese banks, such as the Bank of China (BOC) and Industrial and Commercial Bank (ICBC), are rapidly improving their service, and they have the best branch networks.

One test of your bank’s service is whether it’ll take care of all verification and processing related to the State Administration of Foreign Exchange (SAFE) without charging you fees. (See the upcoming section titled “Switching things up: Accounts for foreign exchange” for info on SAFE.)

If you’re going to borrow money for your business from onshore sources (see the ...