TIME Beijing bureau chief Jamie FlorCruz explains. "Although China is one of the world's largest economies and a leading global trader, its domestic economy is cash-based and almost computer-unrelated." And what's more, those sectors of the industrial base that have already modernized still have workers around who remember how to get things done manually if the few computers do crash. "There's a general Luddism that pervades much of China's industry," reports David Wolf, director of Claydon Gescher Associates, a Beijing consultancy. "Even in places where you have automatic processes, like banks, you've got sufficient labor and skill to go back to manual processes should the automated ones fail." For once, being less developed is an advantage -- China's rural majority isn't worried about Y2K crashing their bicycles.

But for the urban minority who depend on modern infrastructure for their daily lives, the impact is likely to be much greater. Says FlorCruz, "The most vulnerable sectors are China's advanced telecommunications network and the millions of computer chips embedded in electronic equipment, ranging from hospital life-support machines to apartment elevators." Fixing these problems has proven to be an enormous challenge for the Beijing government. Although some of the efforts under central planning have led to highly motivating policies -- for example, the government edict requiring that all airline executives be on a commercial airline flight on New Year's Day 2000 -- most have been hampered by "lack of experience, money and resources, as well as bureaucratic wrangling," according to FlorCruz.

China's central bank, The People's Bank of China, was ranked last among East Asian banks by Moody's Investor Service in a report released in April. Analysis by the Gartner Group, a Y2K consulting firm, anticipates that only 30 percent of China's computers will be ready for the date change, and that China will experience significant disruptions of communications, transportation and utilities.

As far as asking for help from outside the country goes, the Chinese face a cultural conundrum. Explains FlorCruz, "The Chinese are both too proud to admit they can't deal with the bug themselves, and too pragmatic not to admit their handicaps and hint for financial and technical help." Pride may have made the Chinese government slow to devote resouces to Y2K, but pragmatism is making a late comeback: China is enlisting the help of expensive Western consultants, multilateral agencies and international associations such as the World Bank, the United Nations and the International Civil Aviation Organization (ICAO). And looking to the future, Microsoft has invested $80 million in a Beijing research lab, which will try to crack the massive Chinese market with products such as Venus, a WebTV-like set-top box designed to take advantage of China's massive installed base of televisions.

In the end, the fact that China's economy and general populace are largely insulated from the fickle winds of technology will be a big help come next New Year's. Even if their computers remain Y2K-unfriendly and crash en masse over the date change, China can avoid disaster by ducking for cover under the serendipitous umbrella of underdevelopment.