Central bank urges non-cash payment
(Shenzhen Daily/Agencies)
Updated: 2006-01-24 09:00

The central bank is pushing for wider use of non-cash instruments for payments this year to meet the needs of the mainland’s developing economy, the Financial News said yesterday.

“In the first half of 2006, we must set up a national system for making small (non-cash) payments,” according to the newspaper, which quoted Su Ning, the vice head of the People’s Bank of China.

While the central bank did not provide many details of the plan, it included the establishment of national and regional centers to handle the settlement of checks, bank drafts and other non-cash instruments for commercial and personal use.

In China, cash is still king and a scarcity of credit cards and other forms of electronic payment have limited growth in consumer spending, a key element for economic planners this year as the mainland shifts away from export-driven growth.

About 4 for every 1,000 people on the mainland own an international credit card, according to Visa. By comparison, Hong Kong and Taiwan both have about one credit card per person.

Earlier this month, the government said it had formally launched a nationwide database to help banks better assess the creditworthiness of loan applicants.

Eager to promote a modern credit culture, the government has been pushing for a unified credit database to help domestic banks evaluate risk as foreign competition rises.