Shanghai's Bund and Beyond

Shanghai's Bund and Beyond: British Banks, Banknote Issuance, and Monetary Policy in China, 1842-1937

Niv Horesh
Copyright Date: 2009
Published by: Yale University Press
Pages: 224
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  • Book Info
    Shanghai's Bund and Beyond
    Book Description:

    As China emerges as a global powerhouse, this timely book examines its economic past and the shaping of its financial institutions. The first comparative study of foreign banking in prewar China, the book surveys the impact of British overseas bank notes on China's economy before the outbreak of the Sino-Japanese War in 1937. Focusing on the two leading British banks in the region, it assesses the favorable and unfavorable effects of the British presence in China, with particular emphasis on Shanghai, and traces instructive links between the changing political climate and banknote circulation volumes.

    Drawing on recently declassified archival materials, Niv Horesh revises previous assumptions about China's prewar economy, including the extent of foreign banknote circulation and the economic significance of the May Thirtieth Movement of 1925.

    eISBN: 978-0-300-14362-1
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Acknowledgments
    (pp. ix-xii)
  4. List of Abbreviations
    (pp. xiii-xiv)
  5. Part I
    • Chapter 1 Introduction
      (pp. 3-23)

      Following Marco Polo’s celebrated memoirs, many Western observers recognized China as the “native birthplace” of paper currency in the eleventh century.¹ Yet it was seldom noted that, eight centuries later, British banks issued paper currency in few of China’s largest cities.

      This dimension of British banking in China is all the more compelling because a number of new books have done much to construe the rise of China’s homegrown modern banks as of the late nineteenth century. Brett Sheehan has termed this newfound interest in the history of banking in China as nothing short of a “mini explosion”—with notable...

    • Chapter 2 The Sino-Foreign Financial Grid in Prewar Shanghai
      (pp. 24-48)

      This chapter is intended to set the scene in which quasi-foreign bank-note issuance came about in prewar Shanghai; without this background one could scarcely comprehend the significance of this monetary phenomenon. Whereas the following chapters will expand on the particularities of British note issuance in Shanghai, this one will draw on a wide range of lateral and secondary sources in order to sketch out in very rough strokes how financial markets operated in the city, with particular emphasis on the confluence of foreign and local institutions.

      Until recently, studies of the history of Shanghai were largely devoid of precise microeconomic...

    • Chapter 3 The Chartered Bank and Its Note Issue
      (pp. 49-70)

      This chapter explores the history and banknote circulation patterns of what, by the 1910s, had become one of the leading British financial institutions in East and Southeast Asia: the Chartered Bank of India Australia and China (CBIAC).¹ The bank’s story and balance-sheet figures are used as the basis for a comparative discussion of the role that British and other foreign banknotes played in the Chinese economy before World War II. By assessing quantitative evidence, linkages are found between the bank’s principal branch circulation volumes and monetary reform in East Asia. The argument advanced here is that Hong Kong was po...

  6. Part II
    • Chapter 4 HSBC and Its Note Issue in Shanghai, 1866–1925
      (pp. 73-109)

      This chapter explains how banknotes first issued by the Hongkong and Shanghai Banking Cooperation (HSBC) in 1866 had helped resuscitate financial markets during the late-Imperial era, and how the demand for these banknotes shot up amid the political and economic disintegration that typified warlordism in the early-Republican period.

      Drawing on local balance sheets and other primary sources, the chapter will argue that HSBC’s note issue offset the deep-seated suspicion of paper money in China that even Eu ro pe an thinkers like Karl Marx had been aware of. It will also argue that note issuance by British banks in China...

    • Chapter 5 HSBC and Its China Note Issue in the Late-Republican Era, 1925–1937
      (pp. 110-152)

      This chapter aims to explain how the GMD’s rise to power projected on HSBC’s China banknote issue. Examining a period that stretches from the May Thirtieth Incident (1925) to the outbreak of the Sino-Japanese War (1937), the chapter will challenge the notion of little re sis tance that British banks are thought to have faced in China, as demonstrated by Jones’s passage above. Quite to the contrary, it will show that antiforeign agitation, mounting competition by Chinese-owned modern banks, and GMD government reform heavily impinged on the operations of British banks in China and contained by implication the spread of...

    • Chapter 6 Conclusions
      (pp. 153-162)

      The following discussion aims to bind together the political, institutional, and technological threads emanating from the exposition of British banknote issuance in China. It begins by spelling out the ways in which the note circulation volumes presented in this book depart from previous estimates, and why this calls for a reassessment of the efficacy of antiforeign boycotts during the Republican era.

      From clearly delimited issues where balance-sheet figures count most, the discussion will move to broader themes that bespeak the significance of British overseas banking in China. The last section will then explore whether quasi-foreign banknote issuance—being...

  7. Appendix: British Bank Note Circulation in Shanghai, 1881–1935
    (pp. 163-164)
  8. Notes
    (pp. 165-202)
  9. Glossary
    (pp. 203-204)
  10. References
    (pp. 205-232)
  11. Index
    (pp. 233-240)