No, it is not necessary to exchange for Chinese currency (Yuan) prior to arriving into China, as money can be easily exchanged at banks, hotels, and major shops in each city. The fee is also very minimal (1% or less). All currency exchange transactions require your passport as photo ID. Be sure to keep your receipt of each transaction for your records. Please be aware that ATM machines are available, but must be internationally link to draw money from your bank. At this time we do not know which ATM's will work and not work. Please bring cash and plan to use credit cards (Visa, Master Card or American Express) for major purchases. Currency must be fairly recent and crisp condition and must not have writiing on it. If it looks wore out, old or have writing banks and vendors will reject it. Currently, $1 USD equals approximately $7 Yuan. Travelers checks have been increasingly difficult to cash at hotels, Chinese banks and other places that handle foreign currency exchanges. While they are still fine to use, make sure you have spare cash on hand until you find a bank or exchange market that accepts them.
