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The rise of a financial revolution in Republican China in 1900-1937: an institutional narrative

Ma, Debin (2016) The rise of a financial revolution in Republican China in 1900-1937: an institutional narrative. Economic History working papers, 235/2016. The London School of Economics and Political Science, London, UK.

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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 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 during this era of national dis-integration. Our narrative carries far-reaching implications on the ongoing great divergence debate.

Item Type: Monograph (Working Paper)
Official URL: http://www.lse.ac.uk/economicHistory/home.aspx
Additional Information: © 2016 The Authors
Divisions: Economic History
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E22 - Capital; Investment (including Inventories); Capacity
N - Economic History > N1 - Macroeconomics and Monetary Economics; Growth and Fluctuations > N15 - Asia including Middle East
N - Economic History > N2 - Financial Markets and Institutions > N25 - Asia including Middle East
N - Economic History > N4 - Government, War, Law, and Regulation > N45 - Asia including Middle East
Sets: Departments > Economic History
Collections > Economists Online
Date Deposited: 16 Feb 2016 12:29
Last Modified: 18 Feb 2016 09:19
URI: http://eprints.lse.ac.uk/id/eprint/65371

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