How to Pay Contractors in China

4 min read

When companies look for international contractors, their search often starts in China. China has the world’s largest population and the increasingly skilled workforce you’d expect from a first-world country. The question is, how do you pay contractors in China if you choose to work with them? Many companies just aren’t sure of what options exist.

The good news is that there are more than a few ways to pay contractors in China. It depends on how often and how much you’re paying, and what the preferred mode of payment is for the contractor. There are also currency considerations, which can get complicated going through traditional payment transfer channels. Here’s what you need to know about paying contractors in China if you look overseas for seasoned workers.

Why hire contractors in China?

As mentioned, China has the largest population in the world, which puts the odds of finding a skilled contractor in your favor. Whether you’re looking for a graphic designer, audio engineer, digital artist or full stack developer, you’ll have plenty of talent to choose from. Better still, education in China is exceptional, so you can be sure you’re getting someone with institutional knowledge who can perform at the level you need them to.

Another great benefit to working with Chinese contractors is the general similarities in work culture. Chinese contractors tend to use the same types of technologies as North American workers, follow similar conventions when communicating and understand their place in a global economy. This makes it easier to set expectations and communicate details.

While cost of living in China is on the rise, it’s still about half that of North America, which makes hiring Chinese contractors very affordable for many companies. That said, you’re still likely to pay top-dollar for skilled contractors, since Chinese professionals know their worth in the world economy.

Finally, there’s a 12-hour time difference between North America and China, which can be a huge benefit to companies who want to mobilize a “third-shift” team. Send off your projects at the end of the workday and have them back before lunch the next day!

Currency and transfer considerations

The predominant currency in China is the Renminbi—more commonly known as the Yuan (CNY). The currency conversion from United States Dollars (USD) is actually one of the most-traded currency pairs in the world, which makes it easy to get real-time rates on foreign exchange. Most times, the ratio of CNY to USD hovers around 6.5:1, meaning there’s roughly six-and-a-half Yuan to the Dollar.

Ways to pay contractors in China

Paying contractors in China can be tricky for a number of reasons. China and the United States don’t always have the best relationship, which can cause tension when it comes to financial transactions. There are also barriers to paying foreign contractors through conventional means. Here’s a look at the options available to companies (and when they’re best-used):

  • Wire transfer. Wire transfers are fast and secure, but they cost more than makes sense for most businesses using them to pay regularly. These safe transactions are best-used for one-time, lump-sum payments, and only when it needs to happen quickly.
  • Check or money order. For most businesses checks and money orders are a last resort. China is one of the few countries where these paper forms of payment are still a viable and reliable option, but they take far too long to get to their destination. Moreover, once mailed, you lose all control and visibility over the payment. It’s just not ideal in a digital world.
  • Bank transfer. ACH transfers are quick and easy, but they require banking information from the recipient, which isn’t always easy to get when working with foreign contractors. Moreover, some banks will auto-stop transfers to China unless preauthorized. Moreover, there’s currency conversion to worry about and your bank might not always give you a prime conversion rate.
  • Digital payments. Digital payments have made paying international contractors much simpler. There’s no bank account information needed, and digital wallets make it easy to send payment and track it through delivery. Contractors have the ability to handle their funds as they see fit, which is great for those who want to keep it in a specific currency.

There are many different ways to pay contractors in China, but not all of them are always applicable. For most, bank transfers will work fine when set up correctly. That said, digital payments have quickly become the de-facto payment option for their simplicity and ease.

The best way to pay independent contractors in China

Digital payments put companies and contractors in control over their funds. Companies get the transparency, prime currency conversion rate and simplicity they need when moving money across borders. Meanwhile, Chinese contractors can see where their money is and can manage it in their digital wallet in the way that works best for them. It’s a win-win that promotes synergy between the world’s two largest economies.



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