ABSTRACT
The need for wartime banking and financial controls created important opportunities for the Nationalist government to consolidate state power and to monopolize banking and finance. When Japanese troops encircled Shanghai, the Chinese central banking group and many private commercial bank branches were forced to relocate to the hinterland. The relocation weakened many banking functions in Shanghai, which gave Chiang Kai-shek and his brothers-in-law the chance to gain complete control of the banking system. Money and power became tightly combined in special wartime circumstances. A highly monopolistic and bureaucratic banking system was created. This bureaucratic system generated many serious political problems that included corruption in wartime and postwar China.
