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Sino-Foreign Business Networks: Foreign and Chinese banks in the Chinese banking sector, 1890–1911

Published online by Cambridge University Press:  10 October 2019

Hong Kong Institute for the Humanities and Social Sciences, The University of Hong Kong Email:


At the turn of the twentieth century, foreign bankers viewed China as one of the up-and-coming markets for international banking. This led to a rapid influx of foreign banks into the banking sector of the China coast. Consequently, foreign banks became a major presence in the treaty ports, where they financed China's foreign trade, provided loans to the Chinese government, and supplied Chinese banks with credit. However, their operations in the Chinese banking sector were always dependent on interaction with Chinese banks. Previous scholarship has largely portrayed the relationship between foreign and Chinese banks in terms of the former dominating and controlling the banking sector of China's treaty ports. This article challenges this view and shows that the relationship between foreign and Chinese banks was one of interdependence rather than one-sided control. It demonstrates how foreign banks had to adapt their business practices to the Chinese business environment and how they were integrated into existing Chinese business networks. Moreover, this article reveals how Chinese entrepreneurs could use their relationship with foreign banks for the benefit of their own business networks and exploit information asymmetries between foreign and Chinese banks to generate profits. The result of the development of this interdependent relationship between foreign and Chinese banks, and of the integration of the former into existing Chinese business networks was the formation of Sino-foreign business networks, which played an important role in making possible the operations of financial markets in China's transnational treaty port economy.

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This article is partly based on my PhD thesis completed at the University of Cambridge in 2017, which was funded by a studentship of the Arts and Humanities Research Council of the United Kingdom, grants from the German Academic Exchange Service (DAAD), the British Council, and the China Scholarship Council and a Doctoral Fellowship of the Chiang Ching-kuo Foundation. Further financial support has been provided by the Japan Society for the Promotion of Science through a JSPS Standard Postdoctoral Fellowship and JSPS KAKENHI Grant Number 17F17310. I am grateful for the financial support provided by these organizations. I would like to thank Parks M. Coble, Sherman Cochran, Joseph P. McDermott, Andrea McElderry, Hans van de Ven, and the anonymous reader of Modern Asian Studies for their encouragement and their very useful comments and suggestions on earlier versions of this article. For their comments, I also thank the audience at the Association for Asian Studies 2017 Annual Conference (especially Elisabeth Köll). Finally, I am grateful to Debin Ma and Micah Muscolino for their helpful suggestions during my viva.


1 In the three previous decades there had been a much more moderate growth of China's foreign trade, from a value of 127,248 Haiguan taels in 1869 to 207,832 Haiguan taels in 1889. See Liang-lin, Hsiao, China's Foreign Trade Statistics, 1864–1949, Cambridge, MA, Harvard University Press, 1974, pp. 2223CrossRefGoogle Scholar. On the rapid growth of foreign trade during the last two decades of the Qing dynasty, also see van de Ven, Hans, ‘The Onrush of Modern Globalization in China’, in Globalization in World History, Hopkins, A. G. (ed.), London, Pimlico, 2002, p. 176Google Scholar.

2 Yumin, Zhou, Wanqing caizheng yu shehui bianqian [Late Qing Public Finance and Social Change], Shanghai, Shanghai renmin chubanshe, 2000, pp. 323329, 404–407Google Scholar; Yisheng, Xu, Zhongguo jindai waizhai shi tongji ziliao, 1853–1927 [Statistical Materials on the History of China's Modern Foreign Debt, 1853–1927], Beijing, Zhonghua Shuju, 1962, pp. 2227Google Scholar.

3 On the spread of international banking since the nineteenth century, see Jones, Geoffrey, ‘Banks as Multinationals’, in Banks as Multinationals, Jones, Geoffrey (ed.), London, Routledge, 1990, pp. 113Google Scholar.

4 Exner, August Heinrich, ‘The Sources of Revenue and the Credit of China, A Lecture Delivered, On 15th April 1887, Before the Central Association For Commercial Geography, Etc., in Berlin’, The China Review, vol. 17, no. 5, 1887, p. 291Google Scholar.

5 Tamagna, Frank, Banking and Finance in China, New York, International Secretariat Institute of Pacific Relations, 1942, pp. 2425Google Scholar; Jingyu, Wang, Waiguo ziben zai jindai zhongguo de jinrong huodong [The Financial Activities of Foreign Capital in Modern China], Beijing, Renmin chubanshe, 1999, p. 14Google Scholar.

6 Quote from Tamagna, Banking and Finance in China, pp. 25–28; King, Frank H. H., ‘Extra-Regional Banks and Investment in China’, in International Banking 1870–1914, Cameron, Rondo and Bovykin, V. I. (eds), Oxford, Oxford University Press, 1991, pp. 371405Google Scholar. For an overview of the presence of foreign banks in China's treaty ports at the end of the Qing dynasty, see Zensuke, Yasuda, Shinkoku kin'yū kikan shoken [A View of the Financial Institutions of the Qing Empire], Tōkyō, Fukuda Kumasaburo, 1902, pp. 2932Google Scholar; Dōbunkai, Tōa (comp.), Shina keizai zensho. Dai roku shō [A Complete Survey of the Chinese Economy, Vol. 6], Tōkyō, Tōa Dōbunkai, 1909, 4th edn, pp. 811814, 980–1000Google Scholar; Bell, H. T. Montague and Woodhead, H. G. W., The China Year Book 1912, London, George Routledge and Sons, Limited, 1912, p. 302Google Scholar. In this article the ‘Chinese banking sector’ always refers to the banking sector of China's treaty port economy, not that of the rest of the Chinese economy. On the concept of the treaty port economy, see So, Billy K. L., ‘Modern China's Treaty Port Economy in Institutional Perspective: An Introductory Essay’, in The Treaty Port Economy in Modern China: Empirical Studies of Institutional Change and Economic Performance, So, Billy K. L. and Myers, Ramon H. (eds), Berkeley, University of California Press, 2011, pp. 127Google Scholar.

7 While the first modern Chinese banks modelled after Western banks started to appear during the last years of the Qing dynasty, they only became a significant factor in the Chinese banking sector after 1911. See Linsun, Cheng, Banking in Modern China: Entrepreneurs, Professional Managers, and the Development of Chinese Banks, 1897–1937, Cambridge, Cambridge University Press, 2003, Chapters 1–3Google Scholar.

8 On Shanxi Piaohao, see Qitian, Chen, Shanxi piaozhuang kaolüe [An Examination and Outline of Shanxi Piaohao], Shanghai, Shangwu yinshu guan, 1937Google Scholar; reprint, Beijing, Jingji guanli chubanshe, 2008. On the limited contact with foreign banks, see Guohui, Zhang, Wanqing qianzhuang he piaohao yanjiu [A Study of Qianzhuang and Piaohao during the Late Qing Dynasty], Beijing, Shehui kexue wenxian chubanshe, 2007, 2nd edn, p. 119Google Scholar; Yasuda, Shinkoku kin'yū kikan shoken, p. 28. Luman Wang gives some examples of contact between foreign banks and piaohao, and emphasizes the importance of the piaohao’s remittance network for China's foreign trade. See Luman Wang, ‘Money and Trade, Hinterland and Coast, Empire and Nation State: An Unusual History of Shanxi Piaohao, 1820–1930’, PhD thesis, University of Southern California, 2014, pp. 51–59.

9 Zihao, Pan, Zhongguo qianzhuang gaiyao [A Summary of Chinese Qianzhuang], Shanghai, Huatong shuju, 1931Google Scholar. The standard work in English on qianzhuang is McElderry, Andrea, Shanghai Old-Style Banks (Ch'ien-Chuang), 1800–1935, Ann Arbor, Center for Chinese Studies, University of Michigan, 1976Google Scholar. On qianzhuang being the main business partners of foreign banks, see Rawski, Thomas G., Economic Growth in Prewar China, Berkeley, University of California Press, 1989, pp. 130131Google Scholar. While these local commercial banks were generally known as qianzhuang and were also referred to by this name in Shanghai, they were also called other names depending on the region or the size of the financial institution. The most important difference seems to have been that qianzhuang was used in the Yangzi river region, while the term yinhao was used in South (huanan) and North (huabei) China. On the different names used for qianzhuang, see Guohui, Zhang, Zhongguo jinrong tongshi: Di er juan: Qing yapian zhanzheng shiqi zhi qingmo shiqi [A General History of Chinese Finance: Volume II: From the Period of the Opium War during the Qing Dynasty to the Late Qing Period], Beijing, Zhongguo jinrong chubanshe, 2003, p. 15Google Scholar; Dōbunkai, Tōa, Shina kin'yū kikan [The Financial Institutions of China], Tōkyō, Tōa Dōbunkai, 1920, 2nd edn, pp. 440441Google Scholar; McElderry, Old-Style Banks, pp. 11–12.

10 In the scholarly literature, the anachronistic and pejorative term ‘native bank’ is still often used to describe qianzhuang. In this article, however, the more accurate and appropriate terms of ‘qianzhuang’ or ‘Chinese bank’ are used.

11 Quote from Wang, Waiguo ziben, pp. 127–130. For example, also see McElderry, Old-Style Banks, pp. 3, 21–25; Guohui, Zhang, Wanqing qianzhuang he piaohao yanjiu [A Study of Qianzhuang and Piaohao during the Late Qing Dynasty], Beijing, Zhonghua shuju, 1989Google Scholar; reprint, Beijing, Shehui kexue wenxian chubanshe, 2007, p. 64; Xiangyi, Kong, Jinrong piaohao shilun [A Historical Discussion of Finance and Piaohao], Beijing, Zhongguo jinrong chubanshe, 2003, p. 99Google Scholar. An exception is Susan Mann Jones, who, if only briefly, casts doubt on the dominance of foreign banks. See Jones, S. Mann, ‘Finance in Ningpo: The “Ch'ien Chuang” 1750–1880’, in Economic Organization in Chinese Society, Willmott, W. E. (ed.), Stanford, Stanford University Press, 1972, p. 72Google Scholar. In this article, all translations from sources in German and Chinese are my own.

12 Nishimura, Shizuya, ‘The Foreign and Native Banks in China: Chop Loans in Shanghai and Hankow before 1914’, Modern Asian Studies, vol. 39, no. 1, February 2005, p. 114CrossRefGoogle Scholar.

13 On the Deutsch-Asiatische Bank, see Müller-Jabusch, Maximillian, Fünfzig Jahre Deutsch-Asiatische Bank 1890–1939, Berlin, Otto von Holten Verlag, 1940Google Scholar.

14 Zhongping, Yan et al. (comps), Zhongguo jindai jingjishi tongji ziliao xuanji [Selected Statistical Materials on China's Modern Economy History], Beijing, Kexue chubanshe, 1955Google Scholar; reprint, Beijing, Zhongguo shehui kexue chubanshe, 2012, p. 49; Jingping, Wu, ‘Jindai zhongguo jinrong zhongxin de quyu bianqian’ [The Regional Change of Modern China's Financial Centre], Zhongguo shehui kexue, no. 6, 1994, pp. 177179Google Scholar; Sheehan, Brett, ‘Urban Identity and Urban Networks in Cosmopolitan Cities: Banks and Bankers in Tianjin, 1900–1937’, in Remaking the Chinese City: Modernity and National Identity, 1900–1950, Esherick, Joseph (ed.), Honolulu, University of Hawaiʻi Press, 2002, p. 48Google Scholar.

15 Zhang, Zhongguo jinrong tongshi, p. 7; Guan, Gong, Jindai Tianjin jinrongye yanjiu, 1861–1936 [A Study of Tianjin's Financial Industry, 1861–1936], Tianjin, Tianjin renmin chubanshe, 2007, pp. 267268Google Scholar; weiyuanhui, Wuhan difangzhi bianzuan, Wuhan shizhi: jinrong zhi [Wuhan Municipal Gazetteers: Financial Gazetteer], Wuhan, Wuhan daxue chubanshe, 1989, p. 42Google Scholar; Huiyuan, Yao, ‘Jindai Hankou qianzhuang yanjiu’ [A Study of Qianzhuang in modern Hankou], Lishi yanjiu, no. 2, 1990, p. 141Google Scholar.

16 Information asymmetries describe economic transactions or partnerships in which one party has better or more information than the other. See Stiglitz, Joseph E., ‘Information and the Change in the Paradigm in Economics’, The American Economic Review, vol. 92, no. 3, June 2002, pp. 469470CrossRefGoogle Scholar.

17 For a good overview of the structure and institutions of the financial markets in the treaty ports, see Niv Horesh's detailed overview of the financial markets in modern Shanghai: Horesh, N., Shanghai's Bund and Beyond: British Banks, Banknote Issuance, and Monetary Policy in China, 1842–1937, New Haven, CT, Yale University Press, 2009, Chapter 2CrossRefGoogle Scholar.

18 Wasserstrom, Jeffrey N., ‘Cosmopolitan Connections and Transnational Networks’, in At the Crossroads of Empires: Middlemen, Social Networks, and State-Building in Republican Shanghai, Dillion, Nara and Oi, Jean C. (eds), Stanford, CA, Stanford University Press, 2008, pp. 206224Google Scholar. I am grateful to Sherman Cochran for pointing me to this work.

19 Most importantly, see Cochran, Sherman, Encountering Chinese Networks, Berkeley, University of California Press, 2000Google Scholar. Wasserstrom also points out Cochran's work as a study that considers both sides of the ‘Chinese/foreign divide’: Wasserstrom, ‘Cosmopolitan Connections’, p. 209, n. 14. For another example, see Hao Yanping, The Commercial Revolution in Nineteenth-Century China: The Rise of Sino-Western Mercantile Capitalism, Berkeley, University of California Press, 1986. More generally, in her study of Shanghai, Marie-Claire Bergère also points out the necessity of cooperation between foreign and Chinese actors for the functioning of the economy of the treaty port. See Bergère, M.-C., Shanghai: China's Gateway to Modernity, Lloyd, Janet (trans.), Stanford, Stanford University Press, 2009, p. 5Google Scholar.

20 Müller-Jabusch, Deutsch-Asiatische Bank, table opposite p. 326.

21 Glahn, Richard von, The Economic History of China: From Antiquity to the Nineteenth Century, Cambridge, Cambridge University Press, 2016, p. 386CrossRefGoogle Scholar; Wang, ‘Money and Trade’, pp. 89–90.

22 Stanley Fowler Wright, China's Customs Revenue since the Revolution of 1911, Shanghai, Statistical Department of the Inspectorate General of Customs, 1935, 3rd edn, pp. 107–230.

23 Reiß, August, ‘Das Bankwesen in China’, in China: Wirtschaft und Wirtschaftsgrundlagen, Hellauer, Josef (ed.), Berlin, Walter de Gruyter and Co., 1921, pp. 176177Google Scholar.

24 Moritz Kalb, ‘Bericht ueber die Deutsch-Asiatische Bank in Shanghai nebst Erlaeuterungen’ (1 July 1890), Politisches Archiv des Auswärtigen Amtes (Political Archives of the German Foreign Office), Berlin, Germany [hereafter: PAAA], R9208/563, p. 149: 31; ‘The Shanghai Chromo-& Photo-Litographic Company, Limited’ (2 August 1890), PAAA, R9208/563, p. 164; ‘Bericht der Direction für das Geschäftsjahr 1893’ (25 June 1894), PAAA, R9208/563, p. 225; Ferdinand Rinkel, ‘Bericht über die bisherige Geschäftstätigkeit’ (February 1893), Hausarchiv des Bankhauses Sal. Oppenheim jr. & Cie, Cologne, Germany [hereafter: HBO], A VIII 114 Ostasiatische Geschäfte 1888–1914.

25 King, ‘Extra-Regional Banks and Investment in China’, p. 378.

26 Brandt, Loren, Debin, Ma and Rawski, Thomas G., ‘From Divergence to Convergence: Reevaluating the History behind China's Economic Boom’, Journal of Economic Literature, vol. 52, no. 1, March 2014, pp. 7879CrossRefGoogle Scholar.

27 Franz Urbig, ‘Untitled Report’ (23 October 1933), p. 3, Deutsche Bank Archives, Frankfurt am Main, Germany, P08401.

28 Xiao Liang, ‘Guoren jiying gaibian xinli’ [Our Fellow Countrymen should Urgently Change their Mind], Shenbao, 11 June 1935.

29 Kangnian, Wang, Wang Rangqing biji [The Notes of Wang Kangnian], Beijing, Zhonghua shuju, 2007, p. 54Google Scholar.

30 Wang, Waiguo ziben, pp. 179–181; Pengchao, Liu, ‘Jiang Shixing tanhe Yi Kuang an xikao’ [An Inspection of the Case of Yi Kuang's Impeachment by Jiang Shixing], Wuhan Ligong Daxue Xuebao, vol. 26, no. 4, October 2013, pp. 856860Google Scholar.

31 Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, p. 149: 31.

32 ‘Dehua Yinhang lixi dan’ [Receipt of Interest from the Deutsch-Asiatische Bank] (20 May 1897), Sheng Xuanhuai Archives, Shanghai Municipal Library, 073210.

33 ‘Jinggao woguomin’ [A Warning to Our Citizens], Shenbao, 13 October 1912. The banks in question were the Hongkong and Shanghai Banking Corporation, the Yokohama Specie Bank, the International Banking Corporation, the Deutsch-Asiatische Bank, the Banque de l'Indochine, and the Russo-Asiatic Bank.

34 Contemporaries also alluded to corrupt Qing officials hiding their money in foreign banks. See Wagel, Srinivas R., Finance in China, Shanghai, North-China Daily News and Herald, Ltd., 1914, p. 260Google Scholar.

35 Rinkel, ‘Bericht über die bisherige Geschäftstätigkeit’ (February 1893), HBO, A VIII 114 Ostasiatische Geschäfte 1888–1914.

36 Seckendorff to Caprivi (15 May 1891), Bundesarchiv Lichterfelde, Berlin, Germany [hereafter: BArch], R901/12991, p. 4.

37 Quote from Li Hongzhang to Zongli Yamen (7 May 1892), Archives of the Institute of Modern History, Academia Sinica, Taibei, Taiwan [hereafter: AIMH], 01-32-016-03-004; Li to Zongli Yamen (9 January 1893), AIMH, 01-32-017-03-019.

38 Wagel, Finance in China, p. 260; Jianqing, Jiang and Lichang, Jiang, Zhongguo jindai waishang yinhang shi [A History of Foreign Banks in Modern China], Beijing, Zhongxin chubanshe, 2016, pp. 245251Google Scholar; Wang, Waiguo ziben, pp. 177–181.

39 ‘Bericht der Direction für das Geschäftsjahr 1893’ (27 June 1896), BArch, R8024/283, p. 1; Müller-Jabusch, Deutsch-Asiatische Bank, table opposite p. 326.

40 King, Frank, The Hongkong Bank in Late Imperial China, 1864–1902: On an Even Keel, Cambridge, Cambridge University Press, 1988, p. 488Google Scholar. However, this also included the non-Chinese branches of the HSBC. King provides the amount of deposits in Hongkong dollars. I have converted this to Shanghai taels using the exchange rate provided in Denzel, Markus A., Handbook of World Exchange Rates 1590-1914, London, Ashgate, 2010, p. 526Google Scholar.

41 Wagel, Finance in China, p. 260.

42 Rawski, Economic Growth in Prewar China, pp. 135, 392.

43 Brandt to Caprivi (20 April 1891), BArch, R901/12990, p. 162; Rinkel, ‘Bericht über die bisherige Geschäftstätigkeit’ (February 1893), HBO, A VIII 114 Ostasiatische Geschäfte 1888–1914; Li to Zongli Yamen (7 May 1892), AIMH, 01-32-016-03-004; Li to Zongli Yamen (9 January 1893), AIMH, 01-32-017-03-019.

44 McElderry suggests that investment in government loans and industrial projects like railway construction gradually became an alternative, and safer, outlet for foreign banks’ capital, but overlooks the fact that not only were they irregular and not part of the day-to-day business of the foreign banks, but also that such loans were mostly raised by issuing bonds on foreign capital markets and did not come from the working capital of foreign banks. She nevertheless also argues that the provision of credit to qianzhuang was an important outlet for the foreign banks’ working capital, especially their large deposits, before 1911. See McElderry, Old-Style Banks, 94–95. On the irregularity of the loan business, see, for example, Müller-Jabusch, Deutsch-Asiatische Bank, p. 205.

45 Quote from Wagel, Finance in China, p. 239. While Nishimura is cautious about the importance of chop loans for foreign banks’ business as a whole, he also acknowledges their importance for the employment of the banks’ deposits and other surplus funds. See Nishimura, ‘Chop Loans’, p. 121. Using Nishimura's work, Niv Horesh has speculated that British banks in Shanghai might have mainly used chop loans to employ funds acquired through note issuing. See Horesh, Shanghai's Bund and Beyond, p. 32. However, more research would be required to verify this suggestion in the case of British banks in Shanghai. For the case of foreign banks more generally, given Wagel's account cited above, the large amounts of deposits foreign banks received, the diverse other sources of their working capital, and the fact that some foreign banks, like the DAB, only issued very small numbers of notes in some treaty ports, including Shanghai, such a connection between the chop loans and issued notes of foreign banks seems unlikely. On the DAB's note issuing, see Müller-Jabusch, Deutsch-Asiatische Bank, pp. 215–219.

46 Hao Yanping, The Comprador in Nineteenth Century China: Bridge between East and West, Cambridge, MA, Cambridge University Press, 1970, quotes from pp. 89, 215. For a recent study of a comprador building up businesses on the basis of his work for a foreign firm, see Chan, Kai Yiu, Business Expansion and Structural Change in Pre-war China: Liu Hongsheng and his Enterprises, 1920–1937, Hong Kong, Hong Kong University Press, 2006, Chapter 4Google Scholar. For an overview of the literature on compradors, see Nie Haochun, Maiban yu jindai zhongguo jingji fazhan yanjiu, 1840–1927 [A Study of Compradors and Modern China's Economic Development, 1840–1927], Guizhou, Guizhou renmin chubanshe, 2014, pp. 3–15. In his brief overview of the comprador system, Frank King mainly discusses the HSBC's compradors’ activities, but also mentions some of their outside business. See King, The Hongkong Bank in Late Imperial China, pp. 509–518. A very recent addition to the literature is Kaori Abe's nuanced study of compradors in Hong Kong. While Abe acknowledges that some compradors worked as entrepreneurs before becoming compradors, she mainly discusses their enterprises in terms of building on their role and work as compradors. Her discussion of their commercial networks also focuses on networks established between compradors. See Abe, Kaori, Chinese Middlemen in Hong Kong's Colonial Economy, 1830–1890, London, Routledge, 2018, Chapters 3 and 4Google Scholar.

47 Quotes from Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, pp. 149: 12–13; Müller-Jabusch, Deutsch-Asiatische Bank, pp. 46–47.

48 This sketch of Xu's life is based on: suo, Zhongguo shehui kexueyuan jingji yanjiu (comp.), Shanghaishi mianbu shangye [Shanghai's Cloth Business], Beijing, Zhonghua shuju, 1979, pp. 3334Google Scholar; Peichu, Wu, ‘Shanghai waishang yinhang maiban qunxiang’ [A Portrait of the Compradors of Foreign Banks in Shanghai], in Waishang yinhang zai zhongguo [Foreign Banks in China], Tongyi, Shou and Leying, Shou (eds), Beijing, Zhongguo wenshi chubanshe, 1996, pp. 273276, 281–288Google Scholar; Changhui, Hua, Shanghai maiban zhong de ningbobang [The Ningbo Bang amongst Shanghai's Compradors], Beijing, Zhongguo wenshi chubanshe, 2009, pp. 6465Google Scholar; fenhang, Zhongguo Renmin Yinhang Shanghai shi (comp.), Shanghai qianzhuang shiliao [Historical Materials on qianzhuang in Shanghai], Shanghai, Shanghai renmin chubanshe, 1960Google Scholar; reprint, Shanghai, Shanghai renmin chubanshe, 1978 [hereafter: SHQZSL], pp. 33, 89–90, 743–745, 750–751.

49 Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, p. 149: 13.

50 On huihua qianzhuang and Shanghai's Money Trade Guild, see SHQZSL, pp. 9–11; Xuncheng, Du, Jindai zhongguo qianye xiguanfa: yi shanghai qianye wei shijiao [Modern China's Customary Law in the Money Trade: From the Perspective of the Money Trade in Shanghai], Shanghai, Shanghai Caijing Daxue chubanshe, 2006, pp. 1921Google Scholar; Yinpu, Yang, Shanghai jinrong zuzhi gaiyao [A Summary of the Financial Organisation of Shanghai], Beijing, Shangwu yinshuguan, 1930, pp. 3031, 52–53Google Scholar.

51 McElderry, Old-Style Banks, pp. 51–52; Zuwei, Shen, Jindai zhongguo qiye: zhidu yu fazhan [Modern Chinese Enterprise: System and Development], Shanghai, Shanghai renmin chubanshe, 2014, p. 178Google Scholar.

52 Jones, Susan Mann, ‘The Ningpo Pang and Financial Power at Shanghai’, in The Chinese City Between Two Worlds, Elvin, Mark and Skinner, G. William (eds), Stanford, Stanford University Press, 1974, pp. 7396Google Scholar.

53 McElderry, Old-Style Banks, pp. 51–52, quote on p. 52.

54 Ibid., pp. 43, 52–53, 91–96.

55 Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, pp. 149: 12–13; August Reiß, ‘Die Innere Organisation Fremder Firmen in China’, in China, Hellauer (ed.), p. 167.

56 Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, p. 149: 10.

57 Ibid., p. 149: 13.

58 Wu, ‘Waishang yinhang maiban’, pp. 260, 263, 287. Due to the inaccuracies of German transcription of Chinese, it is unclear whether or not Jiang Zhanggong and Litchitching were the same person.

59 Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, p. 149: 13; Wu, ‘Waishang yinhang maiban’, p. 271. For the average annual salary of a bank comprador, see Hao, The Comprador, p. 90.

60 Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, p. 149: 13.

61 Hao, The Comprador, pp. 90–94.

62 Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, pp. 149: 11–13.

63 Hao, Commercial Revolution, Chapter 4. The only non-banks that Hao specifically mentions as suppliers of capital to qianzhuang were the foreign trading firms Jardine, Matheson and Co., and Renter, Brockelmann and Co. Also see SHQZSL, pp. 28–30.

64 Chen, Shanxi piaozhuang, pp. 69, 83–84; Kong, Jinrong piaohao shilun, p. 100; Wang, ‘Money and Trade’, pp. 48–51.

65 Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, p. 149: 25; W. Adams Oram to Hongkong and Shanghai Banking Corporation (Head Office) (30 May 1908), quoted in Nishimura, ’Chop Loans’, p. 119; Hao, Commercial Revolution, p. 110.

66 Du, Jindai zhongguo qianye xiguanfa, p. 28; Yang, Shanghai jinrong zuzhi, pp. 54–59; McElderry, Old-Style Banks, pp. 42–45; Pan, Zhongguo qianzhuang, p. 62; Zhang Gongquan, Gesheng jinrong gailüe [A Summary of Finance in the Different Provinces], 1915, p. 213. The average yinchai interest rate was calculated according to the annual averages for yinchai interest rates between 1873 and 1911 given in Min, Kong, Nankai jingji zhishu ziliao huibian [Nankai Collection of Economic Index Materials], Beijing, Zhongguo shehui kexue chubanshe, 1988, pp. 479480Google Scholar.

67 Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, p. 149: 29; Nishimura, ‘Chop Loans’, pp. 115–116. For an explanation of the chop loan mechanism, also see McElderry, Old-Style Banks, pp. 21–22; Hao, Commercial Revolution, pp. 77–80; and SHQZSL, pp. 29–30, 36.

68 SHQZSL, pp. 65, 474.

69 Zhang, Gesheng jinrong gailüe, pp. 213–214; Von Glahn, The Economic History of China, p. 386.

70 SHQZSL, pp. 788–789, 824–825. Nishimura also uses these statistics and shows that the reliance of qianzhuang on foreign loans was not as strong as is commonly assumed. However, he mistakenly reads benbu tongye and waibu tongye as meaning all non-foreign banks, including piaohao, although these categories only include qianzhuang. Therefore the statistics do not include loans from piaohao. See Nishimura, ‘Chop Loans’, pp. 122–123.

71 On the possible insufficiency of the guarantee sum provided by compradors, also see King, The Hongkong Bank in Late Imperial China, p. 515.

72 Wilson, Craig and Yang, Fan, ‘Shanxi Piaohao and Shanghai Qianzhuang: A Comparison of the Two Main Banking Systems of Nineteenth-Century China’, Business History, vol. 58, no. 3, February 2016, p. 442CrossRefGoogle Scholar.

73 Quote from ‘Geschäfts-Instruction für die Deutsch-Asiatische Bank’ (18 September 1889), HBO, A VIII 114 Ostasiatische Geschäfte 1888–1914. For a later repetition of the same guideline, see ‘Geschäfts-Anweisung für die Deutsch-Asiatische Bank in Shanghai und Berlin’ (13 June 1900), BArch, R2/41689, pp. 32–33; and ‘Geschäfts-Anweisung für die Filialen Calcutta, Hongkong, Tientsin und Tsingtau und die Agenturen Hankow und Tsinanfu’ (24 February 1904), BArch, R2/41689, pp. 34–35.

74 Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, p. 149: 29.

75 Ibid., pp. 149: 12, 25.

76 SHQZSL, p. 38.

77 Zhang, Gesheng jinrong gailüe, p. 213; Dzen, Tien Yue, Das Bankwesen in China, Berlin, Wilhelm Christians Buchdruckerei, 1927, pp. 100, 107Google Scholar; Yinchu, Ma, ‘Zhonghua yinhang lun’ [A Discussion of Chinese Banking], 1929, in Ma Yinchu Quanji [The Complete Works of Ma Yinchu], Ma Yinchu, Hangzhou, Zhejiang renmin chubanshe, 1999, Vol. 4, pp. 290291Google Scholar.

78 Sheng Xuanhuai to Imperial Bank of China (Hankou) (4 December 1897), Shanghai Municipal Archives, Shanghai, China, Q281-1-1, p. 44.

79 Tianjin Chamber of Commerce to Compradors of Foreign Banks (15 September 1908), Tianjin Municipal Archives, Tianjin, China, J0128-2-002449.

80 The lack of alternatives to relying on a comprador is an old theme in writings on commerce in China, which can be found in contemporaneous accounts. See, for example, ‘The “Middlemen” of China’, British Board of Trade Review (August 1898), in Commercial China in 1899, Washington, Treasury Department, Bureau of Statistics, 1899, pp. 2215–2216; Dehn, Paul, ‘Handel und Verkehr’, in China: Schilderungen aus Leben und Geschichte, Krieg und Sieg, Kürschner, Joseph (ed.), Leipzig, Verlag von Hermann Bieger, 1902, pp. 399400Google Scholar; Arnold, Julean, Commercial Handbook of China, Volume 2, Washington, Government Printing Office, 1920, pp. 254258Google Scholar.

81 McElderry, Old-Style Banks, pp. 50–51, also notes control over chop loans as a possible reason why some Chinese families engaged in banking or trade found it useful to have a family member serve as comprador.

82 SHQZSL, p. 90.

83 Edkins, Joseph, Banking and Prices in China, Shanghai, Presbyterian Mission Press, 1905, p. 34Google Scholar. The interest rate for loans made by qianzhuang could be even higher: see Pan, Zhongguo qianzhuang, p. 82.

84 Wu, ‘Waishang yinhang maiban’, pp. 269–270. For the clearing process of chop loans, see McElderry, Old-Style Banks, p. 41.

85 Nishimura, ‘Chop Loans’.

86 Kalb, ‘Bericht’ (1 July 1890), PAAA, R9208/563, p. 149: 13.

87 Ibid., p. 149: 32.

88 Mann Jones, ‘The Ningpo Pang’, pp. 81–83.

89 McElderry, Old-Style Banks, p. 91.

90 Mann Jones, ‘Finance in Ningpo’, p. 77; Kikuchi Takaharu, ‘Keizai kyōkō to Shingai Kakumei e no kei-ryō, [The Connection between Economic Crises and the 1911 Revolution], in Chūgoku kindaika no shakai kōzō: Shingai Kakumei no shiteki ichi [The Social Structure of China's Modernisation: The Historical Position of the 1911 Revolution], Ajiashi Kenkyūkai (ed.), Tokyo, The Kyoiku Shoseki Co., Ltd., 1966, 2nd edn, p. 92; Wilson and Yang, ‘Shanxi Piaohao and Shanghai Qianzhuang’, p. 441.

91 SHQZSL, pp. 90, 744–745.

92 Mann Jones, ‘Finance in Ningpo’, pp. 76–77.

93 King, Frank, The Hongkong Bank in the Period of Imperialism and War, 1895–1918, Cambridge, Cambridge University Press, 1988, pp. 456460Google Scholar; McElderry, Old-Style Banks, pp. 3, 83–123; Kikuchi, ‘Keizai kyōkō to Shingai Kakumei’, pp. 91–96, 108.

94 ‘The Week's Finance’, The North-China Herald, 30 December 1911.

95 Dzen, Das Bankwesen in China, pp. 107–109.

96 On the stabilizing of the financial market by foreign banks as a form of localization, also see Jiang and Jiang, Zhongguo jindai waishang yinhang shi, p. 344.

97 Average yinchai interest rates calculated according to data in Kong, Nankai jingji zhishu, pp. 479–480. On the influence of foreign banks on the cost of money, also see Peiyu, Song, Jindai Shanghai waishang yinhang yanjiu (1847–1949) [A Study of Foreign Banks in Modern Shanghai (1847–1949)], Shanghai, Shanghai Yuandong Chubanshe, 2016, pp. 267269Google Scholar. For the beginning of this development on the China coast in the nineteenth century, see Hao, Commercial Revolution, Chapter 4.

98 Schumpeter, Joseph, Capitalism, Socialism and Democracy, New York, Harper and Brothers, 1942; reprint, London, Routledge, 2003, pp. 8186Google Scholar.

99 McElderry, Old-Style Banks, pp. 142–147; Nishimura, ‘Chop Loans’, p. 130.

100 Bayly, Christopher, ‘Knowing the Country: Empire and Information in India’, Modern Asian Studies, vol. 27, no. 1, 1993, pp. 343CrossRefGoogle Scholar; Bayly, C. A., Empire and Information: Intelligence Gathering and Social Communication in India, 1780–1870, Cambridge, Cambridge University Press, 1996Google Scholar.

101 Abe, Chinese Middlemen, p. 121. Abe also refers to Bayly. On compradors in China as gatherers of market information, also see Hao, The Comprador, p. 80.

102 For a further example of this limited foreign control of Chinese information systems, see Abe's discussion of commercial networks formed among compradors in nineteenth-century colonial Hong Kong. Abe describes the control Hong Kong compradors wielded over either granting or denying foreigners access to these networks and the market information they offered. See Abe, Chinese Middlemen, pp. 91, 94.

103 An example of Chinese benefiting from information asymmetries following the introduction of new technology is the introduction of inter-port steam transport in the 1860s. Among other advantages, Chinese merchants could use their superior market information to employ the new foreign technology of steam transport more effectively than foreign merchants and thus outcompete them. See Reinhardt, Anne, ‘Treaty Ports as Shipping Infrastructure’, in Treaty Ports in Modern China: Law, Land and Power, Bickers, Robert and Jackson, Isabella (eds), London, Routledge, 2016, pp. 105107Google Scholar. On the general limiting effect of the comprador system on the foreign economic presence and profitability in China, see Hao, The Comprador, p. 217.

104 Bergère, Shanghai, pp. 4–5.

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