Foreign Banks and Global Finance in Modern China: Banking on the Chinese Frontier, 1870-1919

355 Pages·2022·10.894 MB·English

by  Ghassan Moazzin

FOREIGN BANKS AND GLOBAL FINANCE
IN MODERN CHINA
Inthiswide-rangingstudy,GhassanMoazzinshedscriticalnewlighton
the history of foreign banks in late nineteenth- and early twentieth-
century China, a time that saw a substantial influx of foreign financial
institutionsintoChinaandarapidincreaseofbothChina’sforeigntrade
and its interactions with international capital markets. Drawing on a
broadrangeofGerman,English,JapaneseandChineseprimarysources,
includingbusinessrecords,governmentdocumentsandpersonalpapers,
Moazzin reconstructs how during this period foreign banks facilitated
China’sfinancialintegrationintothefirstglobaleconomyandprovided
thefinancialinfrastructurerequiredformoderneconomicglobalization
inChina.ForeignBanksandGlobalFinanceinModernChinashowsthe
key role international finance and foreign banks and capital markets
playedatimportantturningpointsinmodernChinesehistory.
ghassan moazzin is Assistant Professor at the University of Hong
Kong. His research focuses on the economic and business history of
modern China. He received his BA and PhD from the University of
Cambridge.
CAMBRIDGESTUDIESINTHEEMERGENCEOFGLOBAL
ENTERPRISE
Editors
LouisGalambos,TheJohnsHopkinsUniversity
GeoffreyJones,HarvardBusinessSchool
SusieJ.Pak,St.John’sUniversity
Theworldeconomyhasexperiencedaseriesofglobalizationsinthepast
twocenturies,andeach has beenaccompaniedand shapedby business
enterprises,theirnationalpoliticalcontexts,andnewsetsofinternational
institutions. Cambridge Studies in the Emergence of Global Enterprise
focusesonthosebusinessfirmsthathavegiventheglobaleconomymany
of its most salient characteristics, particularly regarding how they have
fosterednewtechnology,newcorporatecultures,newnetworksofcom-
munication, and new strategies and structures designed to meet global
competition.Allthewhile,theyhaveaccommodatedchangesinnational
and international regulations, environmental standards, and cultural
norms.Thisisahistorythatneedstobeunderstoodbecauseweallhave
astakeintheperformanceandproblemsofglobalenterprise.
Acompletelistoftitlesintheseriescanbefoundat:
www.cambridge.org/globalenterprise
FOREIGN BANKS AND
GLOBAL FINANCE IN
MODERN CHINA
–
Banking on the Chinese Frontier, 1870 1919
GHASSAN MOAZZIN
TheUniversityofHongKong
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www.cambridge.org
Informationonthistitle:www.cambridge.org/9781316517031
DOI:10.1017/9781009037891
©GhassanMoazzin2022
Thispublicationisincopyright.Subjecttostatutoryexception
andtotheprovisionsofrelevantcollectivelicensingagreements,
noreproductionofanypartmaytakeplacewithoutthewritten
permissionofCambridgeUniversityPress.
Firstpublished2022
PrintedintheUnitedKingdombyTJBooksLimited,PadstowCornwall
AcataloguerecordforthispublicationisavailablefromtheBritishLibrary.
ISBN978-1-316-51703-1Hardback
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URLsforexternalorthird-partyinternetwebsitesreferredtointhispublication
anddoesnotguaranteethatanycontentonsuchwebsitesis,orwillremain,
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FürmeineEltern
AhmedTaufikMoazzinundSophiaMoazzin
undfürmeineGeschwister
RimundHischam

CONTENTS
ListofFigures pageviii
ListofTables x
Acknowledgements xi
NotesandConventions xv
ListofAbbreviations xvi
Introduction 1
1 AGermanBankinChina:EarlyContactofGermanBankerswith
Chinafromthe1870stothe1880s 24
2 EnteringtheChineseBankingSector:ForeignBanksontheChinese
Frontier 56
3 ChineseBondsforEuropeanInvestors:TheIndemnity
LoansandtheInternationalizationofChinesePublic
Finance,1895–1898 109
4 RailwayDreams:GermanBankersandChineseRailway
Development,1895–1910 150
5 GlobalMarkets,InternationalFinanceandthe1911Revolutionin
China 188
6 DisentanglementandLiquidation:GermanBankersandtheFirst
WorldWarinChina 229
Conclusion 265
Appendices
Appendix1 Deutsch-AsiatischeBankLoanstotheChineseCentral
andProvincialGovernments,1890–1916 277
Appendix2 ForeignBankBranches/AgenciesandAgentsinMajor
ChinesePortswithNumberofEmployees,1908 285
Bibliography 288
Index 322
vii
FIGURES
0.1 OpenedChinesePortsin1914 pagexix
1.1 HermannWallich(1833–1928),1875 27
1.2 AdolphvonHansemann(1826–1903),ca.1900 31
1.3 LiHongzhang李鴻章(1823–1901),1870s 35
1.4 MaxvonBrandt(1835–1920) 39
2.1 BankersoftheDABatasocialgatheringinShanghai,ca.1900 62
2.2 OrganizationofForeignBankBranch(YokohamaSpecieBank)inearly
twentieth-centuryShanghai 64
2.3 a.ThefinancingofChina’sexporttrade;b.ThefinancingofChina’simport
trade 66
2.4 HermannWolff(manageroftheDABinHankou)withChineseemployees
(1899) 68
2.5 ChineseemployeesoftheDABinShanghai,ca.1900 79
2.6 Shanghaiyinchaiinterestrateyearlyaverage,1873–1911 86
2.7 DividendpaymentsoftheDAB,1889–1900 94
2.8 ShanghaibranchoftheDeutsch-AsiatischeBank,earlytwentieth
century. 97
2.9 TheBundinShanghai,fromrighttoleft:theDeutsch-AsiatischeBank,the
CustomsHouse,theHongKongandShanghaiBankingCorporation,early
twentiethcentury 98
3.1 EdwardGuyHillier(1857–1924),ca.1912 120
3.2 WengTonghe翁同龢(1830–1904) 125
3.3 FranzUrbig(1864–1944)duringhistimeinChina 129
3.4 4.5%ChineseImperialGovernmentGoldLoanof1898bondnotationsinBerlin,
1898–9,inpercent 141
3.5 Bondofthe4.5%ChineseImperialGovernmentGoldLoanof1898 142
3.6 Chineseforeignborrowingbycountry,1853–94/1895–8 145
3.7 AverageinterestrateofissuedChinesepublicloans,1874–1911,
inpercent 146
4.1 ZhangZhidong張之洞(1837–1909) 155
4.2 HuYufen胡燏棻(1840–1906) 156
4.3 YuanShikai袁世凱(1859–1916) 162
viii
list of figures ix
4.4 HeinrichCordes(1866–1927) 164
4.5 Deutsch-AsiatischeBankinBeijing,earlytwentiethcentury 165
4.6 TangShaoyi唐紹儀(1862–1938) 166
4.7 LiangDunyan梁敦彥(1857–1924) 167
5.1 China’syearlyforeignborrowing,1867–1911,inmillionKupingtaels 191
5.2 Chineseforeignborrowingbycountry,1899–1911 192
5.3 PriceofBritishandGermanChinabonds,7October1911to30November1911,
inpercent 195
5.4 TheBeijingrepresentativesoftheGerman,British,FrenchandAmericangroups
oftheFourGroupsconsortium.Fromlefttoright:HeinrichCordes(Deutsch-
AsiatischeBank),EdwardGuyHillier(HSBC),MauriceCasenave(Banquede
l’Indochine),WillardD.Straight(J.P.Morgan&Co.) 198
5.5 FrancisArthurAglen(1869–1932).SketchbyJuelMadsen,early1920s 200
5.6 ChinesebondspurchasedbyGermanconsortium,14October1911to3
September1912,inpoundsterling 202
5.7 SpreadsofBritishChinabonds(currentyield),January1910toJuly
1914 203
5.8 SpreadsofGermanChinabonds(currentyield),January1910toJuly
1914 203
5.9 YuanShikaiaspresidentin1912 210
5.10 ZhouXuexi周學熙(1866–1947) 219
5.11 SilverdollarsbeingcarriedthroughBeijingfollowingthesigningofthe
ReorganisationLoanagreement 220
5.12 SilverdollarsbeingloadedattheRusso-AsiaticBankfordeliverytothetreasury
oftherepublicangovernment 221
5.13 Purposeofproceedsfrom1913ReorganisationLoanaccordingtothe
ReorganisationLoanagreement 222
5.14 ReorganisationLoanbondprices(Berlin/London),July1913toJuly1914,
inpercent 222
5.15 Chineseforeignanddomesticborrowing,1912–34,inmillionsilver
dollars 224
6.1 HeinzFigge(1865–1921) 232
6.2 SharepriceoftheDABandotherGermanbanks,1904–13,inBerlin,
inpercent 235
6.3 ShareoftheDAB,1906 236
6.4 TheShanghaiBundwiththeDABontheleft,earlytwentiethcentury 237
6.5 DividendsoftheDABandotherGermanbanks,1889–1913,inpercent 244
6.6 DuanQirui段祺瑞(1865–1936) 256
6.7 ClosureoftheBeijingbranchoftheDABin1917 257
6.8 Totalassets,DAB,1900–32,inmillionShanghaitaels 260