Official: With paper records, more money, China's
                        banks ready for Y2K

                        November 9, 1999 
                        Web posted at: 1:00 PM EST (1800 GMT) 

                        BEIJING (AP) -- China's central bank is
                        printing more money, demanding bankers keep
                        paper records and planning on an extended
                        holiday to protect the banking system from
                        year-end computer problems, government
                        troubleshooters said Monday. 

                        After three nationwide tests, the drafting of
                        emergency plans and more than $1.2 billion
                        spent modifying and checking systems, senior
                        People's Bank of China officials expected
                        Year 2000 computer pitfalls to be minimal. 

                        "We have lessened the risks, and the industry can enter the new century with confidence,"
                        said Chen Jing, the central bank's top troubleshooter for Year 2000 computer glitches,
                        commonly known as Y2K. 

                        Chen's assessment dovetails with appraisals of outside experts that China has mobilized
                        money and manpower, although belatedly, to ferret out Y2K problems in key cities and
                        industries. 

                        The potential for problems and the difficulties in fixing them were, as with most things in
                        populous China, enormous. China's banking system covers everything from would-be
                        global financial competitors with gleaming skyscrapers in Hong Kong to small credit
                        cooperatives in remote parts of the vast countryside. 

                        The People's Bank manages the world's second largest foreign exchange reserves and
                        oversees deposits worth $1.2 trillion. Mindful of the runaway inflation and bank runs that
                        beset its Nationalist predecessors, the Communist government has long seen banking
                        sector stability as an indicator of political health. 

                        "There won't be any significant bank runs due to lack of confidence in our Y2K readiness,"
                        Chen said. 

                        Just in case, Chen said, the central bank was printing extra money and sending it to banks
                        so that they would not have to limit withdrawals by depositors. 

                        Smaller financial institutions were also being ordered to perform transactions manually,
                        with paper records, starting Dec. 10, said Nan Jingming, who is supervising the bank's
                        Y2K preparations. He added that larger banks are being told to back up all data on disks. 

                        To provide extra breathing space, the People's Bank has asked the government to shut
                        banks on Dec. 31, tacking a third day on to the Jan. 1-2 New Year's holiday, Chen said. If
                        granted, automated teller machine services will be suspended for Dec. 31, but should
                        resume unless banking systems fail. 

                        Consumers may also find problems using credit and debit cards, Chen said, although the
                        central bank was now working on a "manual back-up plan" so travelers won't be stranded. 

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