China plans to set up a nationwide computer clearing network to link banks in major cities, as well as a computer trading and clearing system for shares, a senior Chinese government official told Reuters reporter Fidelia Chau. Li Ye, general director of the financial science and technology division of the People’s Bank of China, the central bank in Peking. The effort, which promises substantial business for the computer companies that win the contracts, will be financed by a World Bank loan under the technical assistance programme – to enable China to build a nationwide interbank payments system, although Li declined to give details of the loan – We are still in discussion. Hopefully things can be finalised soon, he said. The system would be used for clearing most retail and other financial instruments. Automation of the banking system is seen as a major step in China’s financial reforms. Chinese banking is largely copied from the former Soviet Union’s manual book-keeping. Computerising our banking system is very important because our economic development needs a strong banking system, said Li. Our aim is that about 50% of our banking outlets will use computers by 1995, rising to 80% by the year 2000. We are also aiming to build the nationwide clearing network by 1995. China has 130,000 banking outlets, most owned by five state-owned commercial banks – Industrial and Commercial Bank of China, the Agricultural Bank of China, People’s Construction Bank of China, the Bank of China, and the Bank of Communications, and about 25% of the branches currently use computers. Many cities and provinces have small-scale computer clearing networks, linked via satellite. Shanghai, Tianjin, Beijing and Canton already use the system. There are currently 72 earth stations and this will grow to 120, linking over 100 cities by year-end. Li said that China is also looking for a nationwide computer trading and clearing network for its nascent stock exchanges.
