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The Rise of a Financial Revolution in Republican China in 1900-1937: an Institutional Narrative

Author

Listed:
  • Ma, Debin

    (London School of Economics)

Abstract

This paper surveys the phenomenal transformation of banking and finance, public debt and monetary regimes during 1900-1937, a period of great political instability in Chinese history. To understand why sectors which are often most vulnerable to the security of property rights and contract enforcement, have become the vanguard of growth in such an era of uncertainty, I highlight the role of institutions as seen in the form of a business dominated quasi-political structure that grew outside the formal political sphere. This structure rested on the institutional nexus of Western treaty ports (with Shanghai being the most important) and China Maritime Customs service, a relatively autonomous tax bureaucracy. By ensuring the credibility of repayment of government bonds, this financial-fiscal mechanism laid the institutional foundation for the rise of modern Chinese banks, a viable market for public debt and increasing supply of reputable convertible bank notes. My survey sheds new light on some of the most important and controversial issues related to Chinese and global economic history.

Suggested Citation

  • Ma, Debin, 2017. "The Rise of a Financial Revolution in Republican China in 1900-1937: an Institutional Narrative," CAGE Online Working Paper Series 319, Competitive Advantage in the Global Economy (CAGE).
    • Handle: RePEc:cge:wacage:319
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    File URL: https://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/319-2017_ma.pdf
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    More about this item

    Keywords

    China; financial revolution; public debt; credible commitment JEL Classification: N15; N25; N45; E42;
    All these keywords.

    JEL classification:

    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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