Bargaining in China is a game.  If you know the rules and play the game with good humour you will find that you can often reduce prices significantly.

Where Bargaining is Acceptable

You can bargain for a better price at most types of businesses in China.  You can bargain at the night markets, small clothing stores, street vendors, tour agencies, realtors and some indoor markets.  You cannot bargain at stores that use barcodes to mark their items or when buying train tickets from the train stations.

If you are not sure if you can bargain at a specific place then look to the Chinese customers as an example.  Do not listen to what the business has to say because they may say prices are fixed when in fact they are only fixed for people that don’t know any better. 

How to Bargain

When bargaining take the attitude of "there’s nothing to lose."

Foreigners are often quoted prices that may be as much as 20 times as high as the equivalent price would be for a Chinese person.  However, just because they quote that price does not mean they will not settle for less.  After hearing their offer you should reply with an offer that is much lower.  As long as you have a smile on your face don’t be afraid to make an offer that you think is even lower than the value of the item.  If your first offer is too high you might lose out, but if it is too low you don’t have much to lose.

It is a habit for travellers to mentally translate prices into their own home currency.  Try not to do this.

If you are in a tourist area DO NOT IMPULSE BUY.  Even if the vendor drops the price from 90 yuan to 20 yuan you may still not be getting the best price.  Chances are that there are many people selling the same item within the area so check out your options first.  Again, you can’t lose by checking out your other options.

In busy markets the initial price you will be quoted for an item will get lower as you walk farther into the market.  Why? Because the shop owners in the middle of the market know you have likely already seen the item at several other stores so they will give you a more competitive price right from the start.  They also know that they can’t tell you that that teapot on display is an original that they personally crafted because they know you would have already seen multiple replicas in the other shops on the way.

You should check for flaws in each item at each shop you visit.  Do not take product quality for granted.  If it has large flaws don’t buy it but if it has any small and acceptable flaws you can use that to push the price down a bit.

If you want to push the price down just a little bit more then learn to look disappointed and walk away.  This is a common tactic.  The seller will often only shout out their cheapest price as you walk away from them.  If they don’t shout a cheaper price to you and you still want to buy from them then just come back later.  They will still be there.  You’ve got nothing to Lose.

Simplified Bargaining Steps

- Ask for the price and make sure they provide the first offer.
- Offer a much lower price than the price they quote you.
- Check the item for flaws.
- Smile and talk the price down.
- Put on a slightly disappointed face and walk away.
- If time permits, repeat this process with similar vendors.
- Choose the best one and pay your money.
- Make sure the change given is authentic and get going.

Major credit cards are accepted at many, but far from all, ATMS in China.  Withdrawing money from an ATM usually avoids the longest lineups and does not require you to show your passport as you would have to at a bank teller.  Using a credit card at an ATM should also give you a slightly better exchange rate than you would get at an airport, hotel, restaurant etc.  Some machines have a limit of 2500 yuan per transaction, however you can make multiple transactions one after the other.

If you are going to be using a credit card in ATM machines you should check with the card provider ahead of time to make sure you know your pin code and the emergency number to call in case your card gets lost.  Modifications to the pin code may be required.  For example, some pin codes will require extra zeros added to the front of the code in order to make it 6 digits long.

ATMs dispense 100RMB notes.  If you are planning on buying small items from street vendors you should first get change at a trustworthy store to avoid getting a counterfeit 50RMB note from the vendor.

Travellers’ cheques are handy if you are travelling in large cities.  They can be exchanged at the main Bank of China branches as well as some hotels and department stores.  It may be hard to find a place to exchange the cheques in smaller towns and rural areas.  The bank of China charges a fee of 0.75% of the value of the cheque. 

At the beginning of 2006 the Bank of China accepted travellers’ cheques from 149 different companies.  Travellers’ cheques in the following currencies were accepted: US dollar, Euro, UK pound, Canadian dollar and Australian dollar.

If lost, travellers’ cheques can usually be replaced in 24 hours.  It will probably take longer than this if you did not personally buy the cheques.  Also remember to keep a record of the cheque numbers separate from the cheques.

The bank of China also sells travellers’ cheques for other banking groups including American Express and Citigroup.  There is a fee of 0.5-1.0% of the value of the cheque.

The Chinese yuan is called the “renminbi” which means “People’s currency.”  It is abbreviated as RMB.  In spoken Chinese the yuan is also referred to as "kuai".  In financial markets the yuan is abbreviated as "CNY".  The Chinese character for yuan is 元 and the symbol ¥ is also sometimes used to denote the yuan.  So 1 yuan, Y1, 1 RMB, ¥1 and 1 kuai are all the same thing.

Ten “jiao” or “mao” equals one yuan.  One hundred “fen” equal one yuan.  However fen are so invaluable that they are not commonly used to make purchases.

Commonly used bills are in denominations of 1, 2, 5, 10, 20, 50 and 100 yuan.  There are also 1 mao, 5 mao and 1 yuan coins.  Counterfeit bills are a problem.  Most stores will check 50 and 100 yuan bills first in order to see whether or not it is fake.  It is not uncommon for street vendors and cab drivers to give fake 50 or 100 yuan bills for change.

In China you can conveniently exchange Australian, Canadian, US, UK, Hong Kong and Japanese currencies as well as the Euro for Chinese renminbi.  However, it is not as easy to exchange renminbi for foreign currency (see "changing money" in Shenyang for some tips).

You should keep your exchange receipts in case you need to exchange renminbi back to the currency of your home country when you exit China.

External Links

Up-to-date exchange rates. 

Information on previously issued series of Renminbi (RMB).

Although it is hard for some foreigners to resist, try to keep in mind that there is no tipping in China.

Nevertheless, some tour guides and hotel staff that cater to foreigners may be willing to accept tips.  It seems tipping is only normal at places that are high class and likely cater to non-Chinese customers.   In these cases a tip will usually be listed as a percentage of the bill.