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January 28, 2011

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Small notes are refused

MANY small businesses in Shanghai are refusing to take 1 and 2-jiao notes from customers because their low value means they are difficult to pass on as change and time -consuming to count.

A Shanghai Daily study found owners in nearly half the local small shops investigated, including convenience stores, fruit stalls and news-stands, especially those run privately, rejected 1 and 2-jiao notes and asked to be paid in coins instead.

Nigel Upstone, from the United Kingdom, told Shanghai Daily he was astonished when a Tesco Express store on Dingxi Road refused to take a 1-jiao note from him.

"I can't believe that it can be lawful to refuse legal tender," he said.

Staff in half of six convenience stores in Changning District rejected the jiao notes, according to the investigation. Staff from two other stores said they would take no more than five from each customer, while the cashier in the last store said the notes must be clean and not torn.

A fruit stall, newsstand and cigarette store flatly refused the notes.

The shop owners explained that it would be impossible for them to spend the notes because nobody wants them, especially with the country's rising prices, and it would take them a long time to count when settling their accounts every day. As well as this, the jiao notes were usually old and dirty, they said.

The notes were issued in 1988 by the People's Bank of China. The 1-jiao note is brown with two portraits of people from the Gaoshan and Manchu ethnic minority groups, while the 2-jiao note is green and features people from the Bouyei and Korean ethnic minorities.

A female cashier in a Tesco store told Shanghai Daily that the reason they declined small value notes was because banks sometimes also refuse to take them.

A member of staff of the Agricultural Bank of China said the bank asks people to make reservations in advance if they want to deposit a large number of small value notes. The bank would not reject the notes and can exchange them for coins.

A reservation is necessary because staff need more time to count the notes, said a staff member surnamed Zhou.

Most other banks also offer the exchange services.

Hu Hanyin, an official with the Shanghai Pudong Development Bank, said it is illegal for businesses to reject the jiao notes, according to Chinese Law.

He said banks had begun taking back the 1-jiao and 2-jiao notes so the quantity would keep decreasing.

"People can change them into coins at banks or keep them as souvenirs," he said.


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