China's Central Bank Shrugs Off Y2K Concerns

Updated 6:40 AM ET August 27, 1999BEIJING (Reuters)

China's central bank has shrugged off reports of potential millennium bug problems at state commercial banks, saying Friday that two nationwide Y2K tests this year had cleared major obstacles.

A spokesman for the People's Bank of China told Reuters that banks had also worked out detailed measures designed to deal with possible crisis linked to Y2K, which could confuse the year 2000 with 1900 and cause computer systems to crash.

But he denied foreign media reports that the central bank had ordered the "big four" state-owned commercial banks to begin building up cash reserves for any massive run by depositors linked to Y2K concerns.

"I've never heard of such kind of measure," the spokesman said.

"We've conducted tests on banks' computers twice this year and both tests were smooth," he said.

"We found some small problems through the previous two tests, and they will be resolved in the third test slated for September," the official said.

The tests, each lasting 24 hours, were carried out on June 19 and July 17. A third test has been set for September 18.

Another official said the central bank was not worried about the millennium bug following the successful tests.

"The tests have shown most banks meet basic requirements. There are no big problems," the official said.

But he said the central bank issued documents early this year ordering state commercial banks to draft a series of measures aimed at tackling possible Y2K crisis.

He declined to give details.

China is believed to be less vulnerable than many industrialized countries to the millennium bug due to its relatively low level of computerization.

But the central bank plans to change the year-end settlement date from December 31 to December 30, another central bank official has said.

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Ray

-- Ray (ray@totacc.com), August 27, 1999