Abstract

"Banking Centralisation in Warlord Northeast China: Financialisation and Late-Development, 1917-1931"

Mingke Ma, University of Oxford (mingke.ma@sant.ox.ac.uk)

During their rule of Northeast China (Manchuria), the Fengtian Clique warlords established centralised banking institutions amid financial deterioration and imperialist penetration. Since 1917, the State Bank of Three Eastern Provinces unified numerous types of currencies circulated across Northeast China. It became the largest bank in the region and incorporated other private Chinese banks under the warlord regime’s governance. This paper argues that the Fengtian Clique’s banking centralisation efforts were local institutional innovations to resist financial imperialism while stimulating indigenous industrial transformation. The Gold/Silver Standard instituted the free flow of capital and goods across the globe, and the semi-colonial formation in Northeast China further enhanced this constraint to economic development. Japanese and Russian concessions in Northeast China made local silver-backed currencies’ purchasing power continuously checked by their relative value against the foreign gold-based ones. However, the State Bank successfully resisted the penetration of imperialist financial power in Northeast China’s financial market by building commercial and transportation subsidiaries to finance the regional commodity trade. Using its capacity to mobilise resources across the region, the State Bank stabilised several waves of regional inflation and created massive credit to stimulate indigenous industrial entrepreneurship to compete against foreign manufactured goods. The Fengtian Clique’s centralised banking system shared similarities to those of the successful late-developers during the late 19th century, especially Germany and Japan. The German universal banks created industrial credit based on the domination of commercial activities, and the Japanese government stabilised its domestic economy by centralising the previously autonomous banking institutions under unified government regulation. Such convergence suggests banking centralisation in warlord Northeast China should be considered part of the global event of late development under financialisation, beyond being regarded as proof that Chinese warlordism could also build effective institutions.