The Adaptation and Resilience of Financial Capitalism on the Periphery: the Shanghai Rubber Stock Market Crisis and the Fall of Imperial China
Shanghai was forced to be opened as a treaty port to Western powers as a result of Qing China’s defeat in the Opium Wars since the middle of the nineteenth century. Shanghai’s openness of foreign trade and legal fabric of the International Settlement laid the groundwork for a flourishing stock market, as embodied by the Shanghai Stock Exchange which was established by foreign businessmen in 1905. It was on this stock exchange that the epochal rubber stock market crisis happened between 1910-1911, an event that has often been considered as the ‘final straw’ for the ailing Qing China—the last dynasty of Imperial China. This financial crisis, right before the political turmoil of China’s transformation from the Imperial regime to the Republican era in the latter half of 1911, serves as a unique case for studying Chinese adaptation and resilience of Western-style capitalism.
Chinese-language studies on the Shanghai rubber stock market crisis revolves around blaming the West for precipitating the crisis, while English and French scholarship focus on the foreign contribution to the Shanghai stock market. This paper investigates this financial crisis in semi-colonial Shanghai from a ‘center-periphery’ perspective. It adopts a novel quantitative analysis of the historical Shanghai Stock Exchange quotations and a thorough historical survey of financial journalism in Shanghai, London and Southeast Asia. Going beyond replicating the role of the West at the center of the world-economy in the making of financial capitalism in Shanghai, the paper demonstrates Shanghai’s unique strength as a capable periphery market that witnessed the adaptation between the Chinese financial system and Western-style financial capitalism, and that managed to transform itself into a modern financial system.
