ABSTRACT

This chapter maps the evolution of the modern Chinese banking sector, focusing specifically on the impact that Western economic ideas and banking institutions had on its development. It demonstrates that the history of China's banking sector has been one of struggle, both internally and externally, for domination over political and economic ideas as well as financial resources. The chapter describes some of the changes that were the consequence of major exogenous shocks, such as war and revolution; others, however, were the result of more gradual shifts and development. It discusses one of the most notorious episodes in the relationship between China and the West, namely the 'opening up' to foreign trade forced upon China following the Opium Wars. The grip of foreign banks on China's financial system was tightened further, when the Qing government became obliged to seek foreign loans to pay off a series of crippling war reparations.