State Building in a Multipolar World: Financial History and the Making of the Modern Chinese State in the Early Twentieth Century
4: International Banking in Modern East Asia: Comparing the Development of Foreign Banks in China and Japan before 1914
Friday, March 25, 2022
1:30pm – 3:00pm EST
Virtual Paper Presenter(s)
University of Hong Kong, Hong Kong
Western multinational banks started to operate in East Asia from the middle of the 19th century. In both China and Japan, these foreign banks financed foreign trade, but also introduced new tools of public finance, such as the issuing of bonds for the Chinese and Japanese governments on European capital markets. However, whilst foreign banks came to occupy an important position as a provider of modern financial services both in the Chinese banking sector and in Chinese public finance throughout the pre-WW1 period, in Japan they remained minor players in the Japanese banking sector and Japanese state finance. Making use of a wide range of Chinese, Japanese, English and German sources, this paper traces the reasons why foreign banks developed in such different ways in China and Japan and provides the first comparative study of foreign banking in modern China and Japan. It shows that, first and foremost, the Japanese Meiji government was able to more effectively reform its own financial institutions and thereby limited the activities of foreign banks. Besides contributing to our understanding of the history of multinational banking in East Asia, this paper thereby also provides a new comparative perspective on the development of modern financial institutions and financial markets in China and Japan.