After seven years and change in China it’s hard not to come to the conclusion that the purpose of the Chinese banking system is to keep you from doing anything useful with your money. It is widely said that the Railway Ministry in China is best surviving example of a reactionary Communist bureaucracy, and after recent events it’s hard to argue with that. But in my experience the big, state-owned banks are giving the Railway bureaucrats a run for their money.
Many people speak in (relatively) glowing terms of the service provided by some of the newer commercial banks, such as China Merchants Bank or Bank of Communications. I have no experience with that, because both of the companies I have worked for in China have limited my options for paycheck deposit to two of the “big four” state banks (the ones Gordon Chang is always telling people are about to implode). Yes, I suppose I could open an account at one of the smaller banks and then move my paycheck every month, but the thought of having any more Chinese bank accounts than I absolutely need makes my liver spasm. Due to a bank switch by my old company, my year in Shanghai, the fact that Chinese banks don’t actually function in any recognized sense of the word “nationally,” and their conviction that joint accounts are some kind of rightist plot, I’ve already left a daisy-chain of zombie accounts scattered across the country. Each has about RMB2 in it and no doubt at least one will be used to hijack my identity at some point in the future.
I would bulldoze a field of spaniel puppies and nursery schoolgirls in fairy costumes to avoid a trip to the bank. Every trip to a big, state-owned bank is like the scene from the end of Beetlejuice where Michael Keaton is in the waiting room for hell with a ten-digit ticket while they serve number 14. It’s not so much the magnitude of the numbers as the glacial pace of the transactions. Teller window service numbers increment like Neptunian orbits – about one a century. If there are even two windows serving general business it’s your lucky day, and every transaction seems to involve a mortgage application in octuplicate and the structuring of some kind of derivative for a grandmother who speaks only a Guangxi provincial dialect, or the hand-counting of RMB100,000 in cash pulled from a man-bag. Surely no simple, retail banking transaction could take a freaking hour.
But of course it could. I myself have been the jerk at the window on many an occasion, while some pensioner laotou at the head of the line pisses and moans loudly about drag-ass foreigners tying up the teller windows with their sketchy international transactions. It’s not that I want the transaction to take forever. I have much better things to be doing than sitting at a teller window, like pulling out my own toenails with needlenose pliers or eating a sandwich made of Wonder Bread and used crankcase grease. But the system moves at the pace it moves at, which is roughly the same pace as continental drift. You know how in 150 million years the San Francisco Bay Area will be in Alaska? That’s the exact same time your transaction will be complete.
Given that using the ATM aside there is no such thing as a simple transaction at a Chinese bank, by far the most confounding thing I’ve had to do is to change large amounts of renminbi into foreign currency. Almost six years ago the CFO of my previous employer sat me down and explained that it would be in my best interest to switch my then US dollar salary into renminbi. Damn if he wasn’t right about that, because in the intervening years the renminbi has kicked the S&P500′s ass as an investment. In US dollar terms I’ve made out nicely since the renminbi started to appreciate back in ’05. Unfortunately my long-term savings currency is the Singapore dollar, which is basically flat in RMB terms, but I’m still killing it on the US dollar. Someday when I’m deported from the continent of Asia for writing uppity blogs that will come in useful.
The catch, of course, is that the renminbi isn’t freely convertible. Oh, sure, it’s nominally convertible, but only in the same sense that nominally I could become a Navy SEAL. The process is designed to be painful enough to discourage me from actually trying in order to save everyone the trouble and embarrassment of watching me fail miserably, or die. That’s why over the past five years I have subjected myself to this process a grand total of twice. The last time was in 2009. The two years since then had both enabled me to accumulate a fair wad of renminbi savings and had dulled my memory of events just enough for trying a conversion to seem reasonable again.
A sensible man suggested that I leave everything in renminbi. After all, the renminbi is still appreciating in US dollar terms, and it seems unlikely that the government will allow any of the big four banks to submarine. But the problem is that as useful as the renminbi is for settling bills in China (where a zero is added to my rent approximately every six months), it is completely illiquid as far as the rest of the world goes. Should I have a sudden need for money overseas, my accumulated renminbi savings in China would be worth about as much as a cargo container full of used cat litter. Interesting perhaps, but hard to pass off as legal tender. And the only thing more horrifying than trying a large-scale personal currency conversion in China is trying a large-scale personal currency conversion in China in a hurry.
I set about gathering the necessary documentation. This included a chopped copy of my work contract, a chopped income statement from my company indicating how much I had been paid in the period covering the income I wished to exchange, and a receipt from the personal income tax office serving my employer that certified the payment of taxes assessed on the income for that period. Plus my passport with current visa and my employment permit (a small, passport-like booklet), which, although I am officially required to carry it at all times, has never been used for any other purpose in all my years in China.
My first attempt was made at my bank branch in Wangjing. It ended in crushing failure when, after waiting an hour to be served, the bank informed me that my documentation would permit me to remit only 15% of the amount I actually wanted to send. Some squinting at the forms revealed that my HR department had procured the tax receipts for only a part of my tenure with the company, something I had somehow missed.
There was, of course, a complexity. Since joining Motorola the company had split, and I had been employed by two different corporate entities in my time there. This required another round of documentation wrangling as I gathered the various contractual addenda reflecting my transfer and a new and more comprehensive set of tax receipts. Then, just to be safe and because the income I wanted to remit extended far enough back, I decided it would be sensible to also assemble the documentation from my previous job. I had most of this from my previous remittance in 2009, but I needed updated tax receipts. So I went to down to Oriental Plaza with my identification and contracts to get the receipts from the appropriate office.
There was, of course, another complexity. I discovered that somehow the Oriental Plaza personal income tax bureau had a typo in my name, listing me as Dillon W. Moss instead of the correct Diccon W. Moss. Part of me wanted to laugh, as the Chinese tax bureau had suddenly transported me back to junior high-school, where the following was a typical first-roll-call-of-the-year experience:
Teacher: Janet Martinez?
Teacher: Shawn Meacham?
Teacher (hesitantly): Um. Uh. Dillon? Dillon Moss?
Me: It’s Diccon.
Teacher (incredulous): Deacon?
Me: Diccon. Short “i”.
Teacher: Diccon William Moss?
Me (to the sound of tittering from other students): Yeah.
Teacher: Oh. (Pause.) Are you sure?
Repeat in next class, and so on. That’s why I started using my middle name.
I get why a junior high teacher in Westwood would assume that “Diccon” is a typo for “Dillon”, but how would a Chinese person know that “Diccon” is unusual any more than a typical American would know that 张艺谋 is a real Chinese name and 草泥马 is a rude pun? It would have been funny except I knew from experience that the bank would deny me for so much as a molecule out of place on my paperwork –This molecule is void! No cash for you! NEXT!–, let alone a suspicious misspelling of my name that might indicate fraud or attempted financing of international terrorism.
Fixing my name in the tax records required nothing so simple as me showing up with my ID or some other appropriate documentation. Instead, my prior employer had to re-file all the paperwork from the period covered with my correct name. This took a month, during which I entertained dark visions of catastrophe detonating my Chinese savings. It wasn’t any more likely then than it was the prior two years, but that’s how the neurotic mind works. Now I can’t move my money at all? Weimar Republic, here we come!
Eventually I got the corrected forms. In the end this is what I took to the bank:
- Three chopped employment contracts
- Two chopped income statements
- Five tax bureau receipts covering different time periods and corporate entities
- My savings passbook (they still use those here)
- My passport (required for basically every transaction at a Chinese bank)
- My employment permit
- Two bank cards (just to be sure…)
I had everything in a big manila envelope that I carried around clutched to my chest like a teenage schoolgirl. I felt like I was applying for citizenship.
This system is needlessly complex. Many foreigners I know have no idea how to exchange large amounts of currency and no two expats I polled gave me the same verdict on the current state of requirements for buying large amounts foreign currency with legitimate income. Indeed, some foreigners I know have given up altogether and are simply waiting for China to open its capital account or have taken to flying cash out of the country (risky) and using money changers on the far end. Did you know that a money changer in Singapore will exchange 200,000 RMB for you if you give him a day’s notice? Now you do.
The system is so complex that even the bank seems to wrestle with it. At the Oriental Plaza branch of my bank, where I finally completed the transaction, there were several alarming huddles behind the counter where tellers and managers conferred about the paperwork. I am usually pretty good at handling bank transactions in Chinese, but this time I’d brought a Chinese friend along just in case. If there is one thing that I know can break my Chinese it’s an unexpected clot of bank bureaucracy. I kept looking at her and asking, “Should I worry now?” She comforted me by saying, “Maybe. It’s hard to tell.”
In the end they chopped all my applications for purchasing foreign currency and wiring it to Singapore and did that worrying thing where they bulldog-clip your completed paperwork together and toss it on a huge stack of similar paperwork. This the signal for you to depart and, if you’re me, compulsively check your online banking to see if the money appears at the far end, or if rats ate the paperwork before the data-entry trolls put it into the Babbage engine in the bank’s basement. 48 hours later, the correct amount of Singapore dollars appeared in my bank in Singapore. The whole process had taken three months to complete. I felt like running through the streets naked except for a party hat and an open bottle of Veuve Cliquot, but foreigners have been deported for much less so I settled for deep sigh of relief.
But not too deep. In 2013 I’ll have to do it again.
Note: The week I completed that transaction was a good one for the resolution of long-standing financial problems. I also received a refund check from the IRS for several thousand dollars following the incorrect assessment of extra taxes from 2009. It took me 13 months to get that check. But at least, unlike a Chinese bank account, the IRS paid a reasonable interest rate on the money.