Yesterday, I went to BOC to wire some money back to Canada.
I was hit with a HUGE "cash transfer" fee (on top of the regular commission and wire fee) because I converted my HKD into CAD before sending the money. They said that to not be hit by this fee, the CAD had to have been transferred into my account.

Do you think this would work? - convert the HKD into CAD in a friend's account (also foreigner), then move the CAD into my account, then transfer it..?? or would this still be 'cash'

Has anyone had a similar experience?

Nope, wouldn't work.

They mean that if the money in your account originated from an overseas transfer or from an overseas check deposit, then you can further transfer that money back overseas with minimal fees. Look at your Bank of China bank book. Right before each transaction amount you'll find the corrsponding currency code. CNY signifies RMB and, obviously, USD signifies US$. Now, right before this currency code you'll see a two-digit number most normally either 00, 10 or 11.

)) signifies RMB cash or cash equivalent deposit. 11 signifies a foreign currency cash or cash equivalent deposit that originated from inside China. 10 is the code for a foreign currency deposit which entered into your account directly from either an overseas wire transfer or from your in-country deposit of an overseas check.

Unless you use funds from your account that contain the code 10, you will got socked for heavy fees. Now, if your friend transfers money from their BOC account to yours, the code will be 11. SOL.

Next time consider getting a cashier's check. The fee is only 50 RMB.

How do cashier's checks work?

Cashier's check is pretty much the same as a money order.