Networks of Capital: German Bankers and the Financial Internationalisation of China (1885–1919)

In July 1888, Simon Alfred von Oppenheim, an offspring of the prominent Oppenheim banking dynasty in Cologne, Germany, was traveling in China as part of a larger world tour. In several letters that he sent home during his travels along the China coast, the young Oppenheim reported on the possibility of establishing a German bank in China. In these letters, Oppenheim painted an encouraging picture of the prospects of such a banking endeavor. He reported that German commercial circles in China would view the establishment of a German bank for China favorably. Moreover, when he met Li Hongzhang, one of the most powerful Chinese officials and reformers at the time, Li also assured him that he would provide his support for the new bank. He wrote to his father, the prominent German banker Eduard von Oppenheim, that “the establishment of a German bank in China, soon, on a big scale and carried out on an accommodating basis, without any doubt seems to me to be a great thing.” Simon Alfred von Oppenheim urged his father to get involved in the establishment of a German bank in China if possible.¹

It was one year later that thirteen of the most important German banks, including the Disconto-Gesellschaft, the Deutsche Bank, and the private bank Sal. Oppenheim, together established the Deutsch-Asiatische Bank (DAB), with its first branch in Shanghai opening for business in 1890. During the following two and a half decades, not only was the DAB the only German bank operating in China’s treaty ports, it also became one of the most important foreign banks in China. It established branches and agencies in most of the important Chinese treaty ports, financed foreign trade with China, supplied Chinese bankers with capital, and floated loans for the Chinese government in Germany.² During the same period, many other foreign banks entered China. While the first foreign bank had entered China as early as 1848, until the 1890s foreign banking had been dominated by a small number of mainly British banks. It was only after 1890 that China saw an “extensive expansion in foreign banking,” with many non-British banks establishing branches along the China coast before the World War I.³

Why did German bankers decide to establish a bank in China? How did foreign bankers interact with Chinese actors, such as Chinese officials and entrepreneurs, and how were they integrated into Chinese business networks? How was China financially integrated into the first global economy, and what role did foreign banks play in this? Situated at the intersection of Chinese, German, and global business and economic history, my dissertation, “Networks of Capital,” uses the history of the Deutsch-Asiatische Bank as a case study to try to provide answers to these questions by investigating the role foreign, and specifically German, bankers played in the history of modern economic globalization in China from the late nineteenth century to World War I.

In doing so, “Networks of Capital” builds on the work of global historians who have stressed the importance of international financial markets and global flows of capital during the first global economy.⁴ It also draws on the work of business historians such as Geoffrey Jones, who views multinationals as “facilitators of globalization” in the nineteenth and early twentieth centuries, and has also demonstrated the crucial role multinational banks played in the making of the first global economy by providing the financial infrastructure that made possible the unprecedented economic integration in the decades before World War I.⁵ While connecting the case of foreign banking in modern China with this literature, “Networks of Capital” also draws on recent efforts by historians of China who encourage the study of modern Chinese history from a more global perspective.⁶

In most of the previous literature, foreign banks in modern China have been viewed and interpreted as part of foreign imperialism. Chinese-language scholarship in particular has been written from this perspective, and has largely depicted the role of foreign banks in the Chinese economy and Chinese public finance in a...