Chinese International Banking

Abstract

After China opened the five ports to foreign trade with the treaty of Nanjing in 1842, foreign banks initially intermediated financial transactions between China and abroad. Although the dominance of foreign banks continued in the twentieth century, as this chapter demonstrates, Chinese financial institutions also played the key roles. As European powers retreated from the financial market of China at the time of World War I, the modern banks led by the bankers who had studied abroad and worked for the foreign banks, such as Shanghai Commercial and Savings Bank and Bank of China, participated in international banking. Even before the opening of ports, the southern provinces of Guangdong and Fujian had been the basis for Chinese traders. Once the flow of goods and people to and from abroad increased from the mid-nineteenth century, the networks of remittance houses provided them with the necessary services. Against this local background, the modern banks including Bank of Canton and Bank of East Asia developed into the financial institutions to cater for Chinese businessmen. Examining the development of the Chinese international banks during the inter-war period, this chapter argues that Chinese traders and businessmen successfully mobilized the techniques and instruments that they had historically cultivated to cope with the new business opportunities.