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Shanghai's Bund and Beyond: British Banks, Banknote Issuance, and Monetary Policy in China, 1842-1937. By Niv Horesh. New Haven: Yale University Press, 2009. xiv + 240 pp. Figures, bibliography, notes, index. Cloth, $48.00. ISBN: 978-0-300-14356-0.
Reviewed by Linsun Cheng
Although the number of publications on the history of modern Chinese banking has grown, few studies have been done on how foreign banknotes impacted Chinese financial institutions between 1842 and 1937. Taking two major British banks- CBIAC (Charted Bank of India, Australia and China) and HSBC (Hongkong & Shanghai Banking Corporation) -as examples, Niv Horesh breaks new ground with this book on the prewar Chinese economy. He explains the reasons for the spread of British banknotes, first, during the later years of the Qing dynasty, and then, beginning in 1912, during the early years of the Republic, before examining the factors that led to the elimination of these notes in 1935.
According to Horesh, "Note issuance was arguably one of the most convenient ways of realizing quick gains" for British overseas banks during the mid-nineteenth century (pp. 56-57). CBIAC and HSBC were the first foreign banks to issue and circulate their notes in China. Initially, these notes were unpopular among Chinese clients, owing to the deeply rooted Chinese suspicion of fiduciary money. By the early twentieth century, however, widespread debasement and overprinting of Chinese local currency led to the spread of foreign...