China's banking industry is Y2K- ready after three nationwide tests, said a central bank official on November 8.

"We are confident that the millennium bug will not affect normal operations of the country's banks, said Chen Jing, director of the payment and technology department with the People's Bank of China (PBOC).

All the computer systems have been modified, upgraded and tested, and contingency plans have been drawn up, the PBOC official said. "All the banking sector will smoothly pass into 2000."

From now on, the Y2K preparations will focus on the continued review and improvement of the contingency plans, training of staff and rehearsals in case of emergencies, Chen said.

Chen noted that to ensure the smooth transition of the system, the PBOC has suggested the central government set December 31 as a holiday, so the banks could be closed to customers and concentrate on end-year settlements and preparing for the contingency measures.

The Automatic Teller Machines (ATM) will also be off to customers that day, said Chen.

As for January 1 and 2, which are traditional holidays for Chinese, Chen said that the commercial banks will decide for themselves whether or not to open.

He said the country will not set restrictions on drawing money around the year 2000, noting that runs on banks will not occur as Chinese customers now have confidence in banks.

"Should such circumstances occur, the central bank would support the commercial banks with plenty of liquidity," he said.

He noted the country so far has invested some ten billion-yuan in the Y2K modifications, not including the cost on staff payrolls and tests.

The Y2K problem originates from the two-digit numbers computer scientists used in the early stages of computer technology to indicate years. When the year 2000 comes, the timing systems of computers may not be able to correctly discern the year 2000 from 1900, which may result in disorder in the computer systems. (Xinhua)