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To: goldsnow who wrote (6532)	8/8/1998 11:07:00 AM
From: goldsnow	Respond to of 10921

Instant cash in growing demand in China - NCR 08:22 a.m. Aug 07, 1998 Eastern HONG KONG, Aug 7 (Reuters) - The automated teller machine (ATM) in China could become as ubiquitous as the noodle stand as banks become more competitive after deregulation, the regional head of China's top ATM supplier said on Friday. ''If you look at the population in China of 1.2 billion and then the population of ATMs, which is less than 16,000, you see the potential is huge,'' said Peter Zee, managing director of NCR's Financial Solutions Group for Greater China. ''China by nature is a cash society,'' Zee told Reuters in an interview. NCR Corp, the world's largest ATM maker, has sold nearly 10,000 ATMs to China since supplying the Bank of China's branch in the southern boomtown of Shenzhen with the country's first 60 ATMs in 1988, said Zee. Despite China's vast labour surplus, banks are looking for non-labour intensive alternatives to branch-banking, Zee said. ''As the Chinese economy moves into privatisation and there is deregulation of the banks, the banks see the opportunity of reducing some of their operations costs,'' he said. ''Even though the labour costs are perceived to be low, the real costs of maintaining and supporting the infrastructure are quite high, he said, adding that these included employee training and benefits such as housing and schooling. Zee said the popularity of ATM banking was increasing competition in the deregulated banking sector. ''The banks' primary consideration is how to improve their competitiveness, and when you talk about money more as a commodity, the differential is what products and services can a bank provide,'' he said. ''If other banks can provide other services such as (ATM) banking, how can you not participate in it? And it is an image issue too,'' he said. Deregulation allowed banks to engage in business in geographic and economic sectors from which they were previously barred, Zee said. ''Before deregulation, each bank had a special charter. Bank of China handled mainly foreign trade, Agricultural Bank handled the rural areas. With deregulation, the government allows banks to participate in other sectors,'' said Zee. ''Since Bank of China has always been (dealing with) exports, it has never had a very big infrastructure within China, so it looked at the deregulation as an opportunity to build up its presence by using ATMs,'' he said. The highest concentrations of ATMs were in Guangzhou, Beijing and Shanghai, Zee said. ''The majority of ATM growth has always been in coastal cities, where the economy has taken the lead.'' However, NCR was in negotiations to open a regional office in the inland city of Chengdu in southwestern Sichuan province. ''You need to have a local presence,'' said Zee. NCR was also in a $20 million joint venture with Beijing C & W Electronics (Group) Ltd for production of ATMs, said Zee. The production facility, which has not been built yet, was set to produce 5,000 ATMs annually by 2002 for sale in China and for export to other Asian countries, NCR said. ((Karen Richardson (852) 2843 6933; Fax (852) 2845 0636)) Copyright 1998 Reuters Limited.