Austerity and Moral Compromise: Lessons from the Development of China’s Banking System

Tobin, Damian

doi:10.1016/j.worlddev.2010.10.002

Cited by 8 publications

(4 citation statements)

References 21 publications

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“…Hong Kong, China's "off-shore" money market has long represented the PRC's financial interface with the rest of the world (Tobin, 2011). Listing on Hong Kong, China provided enterprises with a means of raising funds and bonding themselves to higher corporate governance standards (Sun and Tobin, 2009).…”

Section: Hong Kong China's Rolementioning

confidence: 99%

“…A case in point and one that had important implications for international investors emerged following the default by Guangdong International Trust & Investment Corp (GITIC) in 1998 on interest payments on a bond. GITIC also offered a first insight into how difficult it had become for Beijing both to finance local investment and retain oversight and control over financial institutions at the local level (Tobin, 2011).…”

Section: Bond Marketsmentioning

confidence: 99%

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The development and transformation of the financial system in the People’s Republic of China

Tobin¹,

Volz²

2018

Routledge Handbook of Banking and Finance in Asia

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The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms. Working papers are subject to formal revision and correction before they are finalized and considered published.

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Section: Hong Kong China's Rolementioning

confidence: 99%

Section: Bond Marketsmentioning

confidence: 99%

The development and transformation of the financial system in the People’s Republic of China

Tobin¹,

Volz²

2018

Routledge Handbook of Banking and Finance in Asia

Self Cite

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“…External trade cannot be conducted without international exchange (Clauson, 1944 (Gerschenkron, 1962: 356). For pre-reform China, the special institutional factors that allowed the PRC to access hard currency were Hong Kong's banking system (Goodstadt, 2006, Tobin, 2011. As part of the sterling area, Hong Kong was beyond the reach of the US embargo on the PRC and as such offered the only point of safe access to the outside world.…”

Section: Mobilising Cross Border Financementioning

confidence: 99%

“…Instead their major concern was a return to protectionism in their major export markets (Tobin, 2011). Secure market access has been a long term priority in achieving socialist modernisation.…”

Section: Policy Implicationsmentioning

confidence: 99%

Renminbi Internationalisation: Precedents and Implications

Tobin

2013

SSRN Journal

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While it is commonly assumed that there are no known precedents against which to benchmark the internationalisation of the Renminbi (RMB), this paper argues that the PRCs own development provides a useful perspective on the internationalisation debate.Specifically it indicates that lessons can be learnt from the successes and the shortcomings of efforts to internationalise the RMB in the 1970s. During this period Chinese state-owned banks in Hong Kong played a central role in mobilising finance for foreign trade. Access to Hong Kong's developed financial institutions allowed the PRC to maximise its receipts from foreign trade, promote the RMB as a stable currency that was likely to appreciate as well as minimise the risks of undue swings in capital flows. The paper shows that although China no longer faces foreign exchange scarcity, economic reforms have not yet resolved vulnerabilities in China's financial institutions. Unlike the 1970s China is no longer immune from market risk that might accompany a reduction in foreign residents RMB holdings. As such Hong Kong's banking system has retained its unique role as the location of choice for mitigating the risk of undue capital swings.

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Continuity and Pragmatism: How Chinese State-Owned Banks Adapted to Hong Kong’s Free Market (1949–1978)

Tobin

2016

Journal of Contemporary Asia

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One of the puzzling features of China's post-1978 economic reforms is how quickly its enterprises adapted to the new business environment. An insight into this puzzle is provided by Chinese state-owned banks in Hong Kong. From 1949-78 these banks, led by the Bank of China, represented China's primary financial interface with the outside world. What distinguished the management of these banks from their peers was their loyalty to communist values. Yet, despite Mao Zedong's anti-imperialist anti-capitalist ideology, the Bank of China demonstrated extraordinary business pragmatism in its engagement with the international financial system. It also exemplified a high level of management continuity which enabled it to see beyond a volatile and often hostile political environment. The paper shows that the post-1978 retreat from ideology and its replacement with commercial incentives proved costly in terms of professional standards. A homogenisation of bank management also made it more difficult to recruit senior management whose loyalty to the Communist Party could be assumed. These findings highlight the importance of rule variation in explaining international differences in management behaviour. More generally the paper shows the long term importance of Hong Kong's role as an internationalising force for China's business and financial sectors.

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Austerity and Moral Compromise: Lessons from the Development of China’s Banking System

Cited by 8 publications

References 21 publications

The development and transformation of the financial system in the People’s Republic of China

The development and transformation of the financial system in the People’s Republic of China

Renminbi Internationalisation: Precedents and Implications

Continuity and Pragmatism: How Chinese State-Owned Banks Adapted to Hong Kong’s Free Market (1949–1978)

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