We'll Pay With Cash!

A few years ago when Chris and I were taking the girls on a short vacation, I asked his assistant to help me make the plane reservations, which she did with her usual speed and efficiency. However, I was shocked to find out that I was expected to pay the travel agency for the plane tickets in cash - the price was around 35,000RMB (or about $5,000 US!)

I immediately apologized for not telling her that I wanted to charge the tickets to our credit card, to which she replied that the travel service didn't take credit cards, and I would have to pay in cash. As you can imagine, for the next two weeks, I was a daily visitor at our local ATM, making small withdrawals every day, slowly gathering RMB, until I had enough for the tickets. Needless to say, that was the first and last time I made that mistake!

Lots of things have changed in China since we got here in 2003, but one thing has changed more slowly than many of the others: The use of cold hard cash.

The currency in China is RMB, or Renminbi, or Chinese Yuan (not to be confused with Japanese yen). The bills come in denominations of 1, 2, 5, 10, 20, 50, and 100 - nothing over a 100 RMB note, which means large withdrawals can be time-consuming, heavy, a security risk, and overall impractical. However, Chinese consumers have a long history of paying with cash and still prefer doing so, rather than using credit/debit cards or making installment payments over time for large purchases.

Cash is used to pay for everything from a new TV to a new house, from a nice bottle of wine to a brand new car, from an overnight stay at a fine hotel to a two-week vacation abroad. Given the recent economic boom and the advent of a growing middle class (plus the number of millionaires, even billionaires that are emerging), all of whom are demanding consumer goods ranging from improved daily practicalities to high-end luxury items and services, you can only imagine how cumbersome and overloaded the cash-only transaction system has become! Think how many trips it would take to the ATM to buy this beautiful red Italian import!

In the past few years, necessary changes have been occurring in the banking practices here and new systems are being put into place which cater to a more sophisticated, discerning and modern clientele who need and want a more practical and convenient means of paying for things. Although bank-issued credit cards are still not widely used in China, direct debit cards and wire transfer systems have become far more commonplace.

We still can't use our American credit cards in most places throughout China, so we regularly patronize local ATMs and carry around wads of small bills; unfortunately, in the process, we've become all too familiar with local and foreign transaction fees, but that's just part of life abroad, I guess.

So, for the moment, should we decide we're going to purchase something like this magnificent work of automotive innovation (or even pay for a ride), we'll have to hope the local ATM doesn't short-circuit while we gather our funds, and then we can tell the dealer, "We'll pay with cash!"