An electronic bill clearing and distribution system went into formal operation on Friday at the China's bill exchange under the Shanghai branch of the People's Bank of China, the central bank. The new system is capable of handling 1,825 financial bills p er minute and will improve the use of funds in China's financial hub, the Xinhua news agency said. Along with the rapid development of Shanghai's banking sector, the number of bills handled by the exchange soared to an average of 200,000 in 1996, double the figure in 1995, with total value growing from 700 million yuan to some 13.9 billion, it said. It did not clarify how the average was calculated. China will fight illegal bankruptcies to avoid wasting government funds and damaging the nation's credit system, central bank governor Dai Xianglong said on Friday.
China has many ailing state enterprises that are losing money and unable to repay loans.
Banks are particularly wary of forcing firms into bankruptcy as they are often unable to protect their claims to assets of a bankrupt firm. The trip is sponsored by Hong Kong brokerage company Mansion House. Co-sponsors include a number of U.S. investment banks, Mansion House adviser Henry Luk said in an interview. Representatives from other U.S. state treasuries also are expected to attend. According to Moody's, the rating reflects the close links between the bank and the Chinese central government, due in particular to its function as an instrument of state policy and economic development.