Thanks bobrage. How do you know so many details and keep your sanity? Or does your name belie my assumption?
Still don't know why an English institution would send U.S. Dollars to a Chinese account if, as you say, ICBC accepts GBP. Does it accept RMB? Seems like a stupid question but, more so than anywhere else, there are no stupid questions in China.
I learned alot in the three and half hours and fourteen forms it recently took me to wire money from my ICBC account to my UK account. I read ICBC's website from top to bottom before I ventured to the head office in my small Henan town - the only way to get things done here is to prepare and prepare and prepare and bring screenshots of what you want to do so the guy behind the desk can't refuse to help you.
This one is the page you want (corss border outward/inward remittances):
http://www.icbc.com.cn/ICBC/Personal%20Banking/CrossborderFinancialServices/ICBCCurrencyExchange/Introduction/The reason we can't have dual currency accounts, by the way, is because passports are considered insufficient forms of ID due to the necessity for real-name-registration for changing money. You have to have a Chinese ID (or a buttload of money for a HSBC premium account thingy) to be able to buy and sell FX inside your own account portfolio.
I too have no idea why they would send the payment in dollars unless their SWIFT intermediary or a clearing bank in China stipulated that they should. If you go up to the teller at an ICBC with a wad of twenty pound notes you can deposit them in your account and they will sit there, in their full regal splendour, in a seperate little GBP pocket for which the bank might charge you a couple of Maoface for using.
From there, you can wire, withdraw in either GBP or RMB (in person only), transfer and so forth until you are blue in the face. Next time I wire money I am going to make the deposit at the branch and then try to wire it through eBanking myself.
All ICBC accounts can handle a range of currencies but we just aren't allowed to change money through eBanking because we don't have a Chinese ID. Which is pants, but there it is.
In short, I am pretty sure that the UK bank messed up.