Arkansas Systems has reached an agreement with People's Bank of China to provide a regional clearing house in three of the People's Republic of China's major cities.

The People's Bank of China currently acts as the regional check-clearing house in China for the U.S. Federal Reserve System. Little Rock-based Arkansas Systems will provide check-processing software to allow the Chinese banking system to convert from a manually intensive operation to a high-speed electronic system.

The People's Bank of China controls more than 100,000 branches nationwide. The new clearing houses will be located in the cities of Nanjing, Shenyang, and Harbin. Similar units are planned for 76 other regions.

According to Vernon Markham, an executive at Arkansas Systems, the new installation will be operational by October.

As the base software for the clearing house project, Arkansas Systems will install its FlexiCheck System, one of the products of its Integrated Transaction Management product. The entire system has been converted to use Chinese language characters. Flexi-Check will run on International Business Machines Corp.'s midrange AS/400 systems along with 3892/XP document processors.

The automated clearing houses will receive batches of transaction data in paper form from the regional banks. The paper batches will be captured and sorted on document processors at each site.

Flexi-Check will enable the clearing houses to automate balancing and control of input and maintain control of work in process. The system is designed to improve the researching of items. It will provide automated control and posting of incoming and outgoing items. According to Mr. Markham, this installation will represent the first time that an automated check-processing system has been installed on a midrange platform in the People's Republic of China.

Ms. Sullivan is a freelance writer based in New York.

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