The Chinese yuan, also known as the renminbi, is China’s official currency. This currency is legal tender throughout China, with the exception of Hong Kong.
Important for payment traffic to China
Renminbi is a freely tradable currency. It cannot however be excluded that the Chinese government could manipulate the exchange rate if it sees a reason to do so. Payment to China in renminbi is only possible from a foreign currency account in renminbi and in the following cases:
With a payment in renminbi you run the risk that the Chinese government poses additional questions. This risk is greater for payment to China than for other countries. The payment could also be rejected in China, after which it would be returned. A foreign bank might make charges for returning a payment.
Goods and services
Ensure that the number of renminbi you transfer matches up with the goods and services supplied. The Chinese government might ask you for the underlying invoice.
The Chinese government wants to maintain its grip on capital flows to and from the country. Are you making a payment to China that is a capital deposit? Take into account the strict checks that will be applied.
Coordination with your counterparty
Discuss with your (new) Chinese trade partners whether they are allowed to receive payments from abroad. Your counterparty must coordinate this with the Chinese government. If your counterparty does not have permission, the Chinese government might well reject the payment.
State your payment details in the correct way
When transferring renminbi to a Chinese bank account, some additional conditions apply, including entering a 'Purpose of Payment' code. Enter the code as a ‘description’ for a new payment instruction to China. If you do not enter this ‘Purpose of Payment’ code, or enter it incorrectly, your payment might be rejected. You can find a list of the ‘Purpose of Payment’ codes in the country information for China.