Papers presented by Yi Liu since 2019
2023 Detroit, MI, United States
"The Resumption of Sino-West German Financial Relations in the Post-War Period "
Yi Liu, Ruhr University of Bochum
Abstract:
With the establishment of the People’s Republic of China and the two German states in 1949, the international political situation and the financial relations between China and West Germany changed dramatically. Although complementary, bilateral trade developed in a turbulent manner in the shadow of the Cold War. In addition, China began to overhaul its chaotic financial market, in which foreign banks and companies, regarded as symbols of imperialism and capitalism, withdrew gradually. Following the massive loss of assets abroad, West German banks underwent a decentralisation led by the Allies. Nevertheless, despite all the difficulties, trade and financial contacts between China and Germany did not come to an entire stillstand. Chinese and German banks employed new ways so as to adapt to the changing international environment, circumvent political risks and resume old financial contacts. In the 1950s, the German banks re-established the Deutsche Asiatische Bank and built correspondent banking relationships with Chinese banks. The relationship gradually developed until the 1980s when German banks became one of the first foreign banks to be permitted to enter China after the launch of the opening-up policy. While previous scholarship has focused on the entry and activities of foreign banks in the Chinese market prior to 1949, this paper draws upon Chinese and German historical archives and aims to shed new light on the resumption and resilience of international financial networks, which were shaped jointly by the economic interests and political positions of both countries. In order to comprehend the motivation and operation of the resumption, the paper emphasises not only the common interests of China and West Germany but also details the diversities rooted in the two financial systems and their stages of development, which led to their different understandings of international financial relations and explains the dynamics of the bilateral financial relations.