Ji Zhaojin, A History of Modern Shanghai Banking. The Rise and Decline of China Finance Capitalism

To attempt a 260 page summary of the history of the Chinese
and foreign banks in Shanghai over a whole century (1842-1952) is an extremely
ambitious project. This was a historical epoch dominated by complex financial
and monetary structures, and agitated by political developments—civil and
foreign wars, imperialist penetration, nationalist reactions and revolutionary
crises—, an epoch which appears as both a phase in China’s modernisation
and an episode in the expansion of international capital.

As a work of synthesis, Li Zhaojin’s study successfully
encompasses all the aspects of this history, which is narrated in a clear, but
necessarily succinct form. There are nine chapters which start from the birth
of the qianzhuang (traditional banks) in the eighteenth century, moving on to
the establishment and rapid rise of the foreign banks (mostly British) after the
Opium Wars, the efforts of the governments in Peking and Chinese entrepreneurs
to meet the challenge by setting up modern banks of their own, the intervention
of new players on the scene (the Japanese and the Americans) during the First
World War, the Chiang Kai-shek government’s policy of control between 1937
and 1945, the collapse of the Nationalist financial system, and finally the nationalisation
of the Chinese banks and the elimination of foreign institutions after the revolution
of 1949.

This account is essentially chronological. It covers the institutions,
the men behind them, official policies and the development of national and international
crises. It is supported by solid documentation, although this is slightly dated
and contains occasional lacunae. It relies mainly on Chinese sources, some of
which go back to the 1950s and have often been utilised. But the author also makes
use of some fine studies and valuable records published over the last twenty years.
However, he makes only limited use of archival material (the Shanghai municipal
archives and the records of Chinese firms). The bibliography of Western material
is based on well-established but fifty-year-old works, like those of Albert Feuerwerker,
Hou Chi-ming, Stuart Kirby and Frank Tamagna. No account is taken of more specifically
focused studies like those of Mark Elvin (on the 1910 banking crisis), Marie-Claire
Bergère (on the modern Shanghai Bankers’ Association), or Brett Sheehan’s
excellent monograph which, in the light of the “New Institutionalism”,
attempts an assessment of the influence of the Tianjin bankers on the emergence
of accepted “rules of the game”, seeing this as a forerunner of the
rule of law(1).

The specialist will discover scarcely any new facts or insights
here. But there are still certain matters of detail which will interest him, such
as the procedures followed by the Bank of China in 1916, when it refused to implement
the moratorium ordered by its headquarters (p. 102); or the loans granted by the
Shanghai bankers to Chiang Kai-shek in the spring of 1927 to accomplish the repression
of the trade unions and communist mass organisations (pp. 166-170); or, again,
the manœuvres by the Hong Kong branch of the Bank of China to prevent the
Nationalist authorities from transferring its reserves to Taiwan in 1949 (p. 242).

Ji Zhaojin provides a conventional analysis of the role played
by the Shanghai banks in the modernisation of China, lamenting the “imperfections”
of the traditional banks as the products of a “precapitalist economy”,
as well as their weakness in the face of foreign competition, while also stressing
the achievements of the Chinese bankers of 1920. The latter are represented as
bearers of the ideals of laisser-faire and democratic politics (p. 257).

The author, who was educated in China but conducted his research
in the United States, has replaced his former Marxist dogma with a set of liberal
beliefs. This has not prevented his intellectual approach from retaining a certain
rigidity, even though, thanks to the experience of his family (his father and
grandfather having been active in Shanghai banking in the early twentieth century),
he occasionally moderates his opposition of tradition to modernity by acknowledging
that the former can serve as a basis for the latter. He concludes his analysis
by turning to the familiar stock of clichés to borrow its praise of Confucianism,
claiming for it all the virtues of the spirit of enterprise: thrift, the work
ethic, etc.

The huge number of transcription errors in the notes and the
bibliography might cause the reader give up in despair. This would be a pity because,
despite its lack of originality, this book is the outcome of serious study. It
brings together in an accessible manner information hitherto scattered throughout
numerous separate works, and it throws light on a series of complex mechanisms
and developments. It will serve as a useful introduction to anybody who is interested
in the modernisation of China, and who seeks greater understanding of the forms
which it is assuming nowadays.


Translated from the French original by Jonathan

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