banks to old-type Chinese banks. The number of Chinese who were—in one form or another—affected by the activities of banks grew rapidly in the nineteenth century, even outside the cities. The banks were also, of course, linked to the trading houses, big and small. Jardine’s Fuzhou comprador sold, for instance, shares on behalf of the Hongkong and Shanghai Banking Corporation, the biggest of all the foreign-type institutions. HSBC had started operations from rented premises in Hong Kong in 1865, with a capital of five million Hong Kong dollars. By the 1880s, it was the biggest bank in China, with offices and agents all over the country. It was banker to the Hong Kong government for British government accounts in China, Japan, Malaya, and Singapore. It issued banknotes in Hong Kong andin Thailand. And most notably it was the banker to the Chinese government, managing most of its public loans between 1874 and the 1920s, making a substantial profit for its shareholders in the process.
Throughout the long period of wars and revolutions in China in the twentieth century, big foreign-run banks such as HSBC remained the preferred bankers for Chinese who gained from the capitalist expansion. While all foreign banks in China became more susceptible to risk after the collapse of the Qing empire in 1911, the romance between Western banking methods and Chinese capital continued to be strong. Ewen Cameron, the manager of HSBC’s Shanghai headquarters, in 1890 boasted that “for the last 25 years the Bank has been doing a very large business with the Chinese in Shanghai amounting, I should say, to hundreds of millions of taels [Chinese dollars], and we have never met with a defaulting Chinaman.” 3
It was only in the early twentieth century that foreign involvement in Chinese industry started to catch up with foreign involvement in trade. One reason was that until the 1890s foreigners were not allowed to invest in production on Chinese soil. Another was Chinese resistance to the introduction of Western commercial law; it took up to 1904 before the concept of limited liability for corporations was accepted. 4 The first Chinese industrial enterprises had developed out of existing companies, mostly in handicrafts. During the 1870s the Qing state and its provincial governments had begun forging links with private companies under the slogan guandu shangban (official supervision, merchant management) as part of the Self-strengthening Movement. Many of the enterprises that were created as part of such schemes—such as the China Merchant Steamship Navigation Company (founded in 1872), the Jiangnan Arsenal (1865), the Shanghai Cotton Cloth Mill (1878), and the Kaiping Mines (1877)—were based on Western technologies. But even though some of these new companies carried out quite amazing feats of reverse engineering to understand and produce foreign machinery, they found it hard to compete against Western-owned shippingand imports. From the turn of the century, foreign investment expanded rapidly, beginning in the mining industry, then in foodstuffs, energy, and textiles, with Shanghai the biggest center of production. Many of these businesses grew quickly and were highly profitable.
There was always a surplus of peasants wanting to work in the cities, but conditions for those who labored in the nascent industries were often poor, whether they were employed by foreigners or Chinese. Hours were long, living conditions filthy, and wages low compared to the cost of living in the cities. Sick or pregnant workers were fired, and children were hired to do the most dirty or dangerous jobs. Women workers, who came to the cities in increasing numbers from the turn of the century on, especially to work in the textile industry, were vulnerable to sexual exploitation by their bosses and often felt that they had to send the greater amount of their wages back to their parents in their home village. Although many Chinese became workers not of their own
Throughout the long period of wars and revolutions in China in the twentieth century, big foreign-run banks such as HSBC remained the preferred bankers for Chinese who gained from the capitalist expansion. While all foreign banks in China became more susceptible to risk after the collapse of the Qing empire in 1911, the romance between Western banking methods and Chinese capital continued to be strong. Ewen Cameron, the manager of HSBC’s Shanghai headquarters, in 1890 boasted that “for the last 25 years the Bank has been doing a very large business with the Chinese in Shanghai amounting, I should say, to hundreds of millions of taels [Chinese dollars], and we have never met with a defaulting Chinaman.” 3
It was only in the early twentieth century that foreign involvement in Chinese industry started to catch up with foreign involvement in trade. One reason was that until the 1890s foreigners were not allowed to invest in production on Chinese soil. Another was Chinese resistance to the introduction of Western commercial law; it took up to 1904 before the concept of limited liability for corporations was accepted. 4 The first Chinese industrial enterprises had developed out of existing companies, mostly in handicrafts. During the 1870s the Qing state and its provincial governments had begun forging links with private companies under the slogan guandu shangban (official supervision, merchant management) as part of the Self-strengthening Movement. Many of the enterprises that were created as part of such schemes—such as the China Merchant Steamship Navigation Company (founded in 1872), the Jiangnan Arsenal (1865), the Shanghai Cotton Cloth Mill (1878), and the Kaiping Mines (1877)—were based on Western technologies. But even though some of these new companies carried out quite amazing feats of reverse engineering to understand and produce foreign machinery, they found it hard to compete against Western-owned shippingand imports. From the turn of the century, foreign investment expanded rapidly, beginning in the mining industry, then in foodstuffs, energy, and textiles, with Shanghai the biggest center of production. Many of these businesses grew quickly and were highly profitable.
There was always a surplus of peasants wanting to work in the cities, but conditions for those who labored in the nascent industries were often poor, whether they were employed by foreigners or Chinese. Hours were long, living conditions filthy, and wages low compared to the cost of living in the cities. Sick or pregnant workers were fired, and children were hired to do the most dirty or dangerous jobs. Women workers, who came to the cities in increasing numbers from the turn of the century on, especially to work in the textile industry, were vulnerable to sexual exploitation by their bosses and often felt that they had to send the greater amount of their wages back to their parents in their home village. Although many Chinese became workers not of their own
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