We cannot verify your location
Browse Book and Journal Content on Project MUSE

Profits, Politics and Panics

Hong Kong's Banks and the Making of a Miracle Economy, 1935-1985

Leo Goodstadt

Publication Year: 2007

This book offers an absorbing account of a turbulent banking industry which will be compelling reading not only for bankers and corporate executives but for readers interested in government's relations with business and the sources of Hong Kong's economic success.

Published by: Hong Kong University Press, HKU


pdf iconDownload PDF (371.0 KB)
pp. v

read more


pdf iconDownload PDF (2.0 MB)
pp. vii-x

This is the second of three books reviewing the connections between government and business in Hong Kong. The first, Uneasy Partners: The Conflict between Public Interest and Private Profit in Hong Kong, investigated the political coalition between officials and the business

read more


pdf iconDownload PDF (548.7 KB)
pp. xi

I am happy to acknowledge the considerable assistance from the Hong Kong Institute for Monetary Research (HKIMR) towards the research on which this book is based. This included the award of research fellowships in 2005 and 2007 and publication of four Working Papers which are cited extensively in the chapters that follow. Dr Hans Genberg, who as Executive Director ...

read more


pdf iconDownload PDF (9.7 MB)
pp. 1-18

Hong Kong is among the most remarkable of the twentieth century's economic ‘miracles’. It overcame the constraints on economic progress that beset the rest of China and the Third World after World War II, despite the loss of its traditional Mainland markets and in the face of rampant protectionism in Western countries. An ‘industrial revolution' transformed the war-ravaged ...

read more

1. Mismanaged by Mandarins

pdf iconDownload PDF (10.4 MB)
pp. 19-36

Throughout the twentieth century, anti-imperialism and a deep resentment of foreign interference were among the most powerful political emotions of the Chinese people. Before World War II, the nation was bent on reforms to modernise social institutions, industrialise the economy and establish democratic government. Western nations began to lose the privileges they had ...

read more

2. Chinese Revolutionaries, Colonial Reformers

pdf iconDownload PDF (12.6 MB)
pp. 37-58

In the years between the two world wars, a new China emerged - and a very different Hong Kong. This was a time of political turmoil and economic crisis on the Mainland. Yet, inspired by a surging sense of Chinese nationalism, a reform process gathered momentum, propelled by a nationwide desire for unified government and the radical reconstruction of China's social and ...

read more

3. Post-war Emergencies: From Boom to Bust

pdf iconDownload PDF (9.0 MB)
pp. 59-74

But there were considerable obstacles in returning to business as normal. World markets no longer functioned freely, and international commercial and financial activities were severely disrupted. In the pursuit of victory - and even just to ensure survival - most governments had taken charge of the direction of their national economies. Indeed, there was a widespread ...

read more

4. Financial Centre under Siege

pdf iconDownload PDF (11.9 MB)
pp. 75-96

The speed with which Hong Kong rebuilt its economy after the ]apanese occupation was not just a cause for astonished admiration overseas. lronically, the colony's rapid return to business as normal provoked demands from abroad for restraints on its unregulated bankers and traders, and it was to spend the first three decades after World War II in a state of siege. Economic ...

read more

5. Industrial Take-off: Cut-price and Self-financed

pdf iconDownload PDF (10.4 MB)
pp. 97-114

When Guomindang rule collapsed and the Chinese Communist Party came to power in 1949, the state took control of the nation's foreign trade, and foreign investment was to be eliminated. The historical foundations of Hong Kong's prosperity vanished. The colony's economy did not disintegrate , however. Instead, it transformed itself into a manufacturing centre whose ...

read more

6. The Rise and Fall of the Chinese Banks

pdf iconDownload PDF (8.0 MB)
pp. 115-128

In the 1950s, there seemed to be no limit to what Chinese bankers could achieve. The Hang Seng Bank, incorporated in 1952, overtook its local and foreign rivals, induding two British note-issuers, and it had become second in size only to HSBC by 1964. The following year saw the downfall of the Hang Seng Bank, which only survived the bank runs of 1965 because it was taken ...

read more

7. A Dangerous Business Model

pdf iconDownload PDF (8.6 MB)
pp. 129-144

The most puzzling feature of Hong Kong's banking history is the eclipse of the local Chinese bankers. The previous chapter described their once proud status, their resilience in the face of political turmoil and economic disasters, and their skilful management of credit risks in troubled times. It also explained how their‘ status deteriorated throughout the 1950s in spite of the extra-Iegal ...

read more

8. An Avoidable Crisis: The 1965 Bank Runs

pdf iconDownload PDF (9.5 MB)
pp. 145-162

As 1965 opened, banking was enjoying a boom, and prospects looked excellent for the economy as a whole. A newspaper headline captured the bullish outlook:‘ Prosperity is around the corner. Banking office openings establish record in 1964'.1 A month later, two banks had failed, runs had begun on other local Chinese-owned banks and the banking industry was under threat.2 ...

read more

9. From Banking Crisis to Financial Catastrophe

pdf iconDownload PDF (10.3 MB)
pp. 163-182

The closing decades of the last century saw no let-up in the pace of Hong Kong's economic expansion. Between 1970 and 1979, the economy in real terms doubled in size, and by 1985, it was three times larger than it had been in 1970 (see Table 1). Behind this remarkable performance lay an economic transformation as rapid and as dramatic as the industrial take-off after World ...

read more

10. Colonial Money and Its Management

pdf iconDownload PDF (9.5 MB)
pp. 183-200

A stable banking industry and sound financial markets need more than just a robust regulatory r

read more

11. The Exceptional Colony

pdf iconDownload PDF (7.0 MB)
pp. 201-212

The management of Hong Kong's finances was an issue which provoked constant mistrust of the colonial administration, not just among the public at large but also among the government's hand-picked appointees to the legislature. It proved almost impossible to convince the community that Hong Kong's reserves - the government's budget surpluses and other assets, ...

read more

Conclusions - A Political Deficit

pdf iconDownload PDF (5.6 MB)
pp. 213-222

Hong Kong's economic ‘miracle' was not based on abrupt breaks with the past or ‘revolutions' in production processes and business techniques. The miracle lay in the surprising quality of its performance by comparison with other Chinese cities, British colonies and the rest of the Third World. Hong Kong's enduring feature between 1935-85 was its success as an ‘enterprise' economy. ...


pdf iconDownload PDF (39.2 MB)
pp. 223-290


pdf iconDownload PDF (10.7 MB)
pp. 291-310


pdf iconDownload PDF (2.1 MB)
pp. 311-315

E-ISBN-13: 9789888052707
Print-ISBN-13: 9789622098961

Page Count: 326
Publication Year: 2007