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IX The Hongkong Bank - The Ultimate Survivor The Hongkong Bank proved the most durable of all Hong Kong's expatriate institutions. Among the most famous British business names, a majority failed to match their Chinese rivals and were taken over, often ignominiously. The previous chapter has traced how the survivors were shorn of their historical lustre. The Hongkong Bank was different. It shrugged off the loss of its business base in Shanghai in 1949, and it adjusted to the shrinking of its market opportunities not only in China, but throughout the whole of the former British Empire. As socialism and nationalism replaced colonialism and capitalism almost everywhere else in Asia during the 1950s, the bank strengthened its dominant position in Hong Kong. As the transition to Chinese sovereignty began, the bank began to develop a global role and, by the end of the century, had emerged as one of the world's most successful international banks. But throughout the second half of the century, it struggled with the colonial administration for the right to control and direct the financial system. The government triumphed - but only after a protracted process that highlighted the conflicts and contradictions inherent in the colonial system and in official attitudes towards economic management. This chapter examines how the bank overcame the handicaps of its colonial culture and treaty port legacy and created a new business model. It analyses the contribution to the commercial success of its privileged position as a quasi-central bank throughout much of British rule. It reviews its attempts to win control over key aspects of financial policy and the process by which it was stripped of its monopoly advantages. The chapter also narrates how it reduced its commitment to Hong Kong as it became a global institution. The Odds Against Survival The Hongkong Bank's ability to flourish despite the radical political and economic changes that transformed Hong Kong in the second half of the 182 Uneasy Partners twentieth century had never been a foregone conclusion. As an institution, the bank was no less colonial than other British firms in the territory throughout most of the twentieth century. Its top cadre of managerial staff was primarily British. The selection criteria included a strong emphasis on sports and a disregard of academic qualifications, and recruits from the United Kingdom were introduced to life in Asia through living arrangements that resembled an army officers mess. The result was that their strongest social ties were firmly within the bank itself, which helped to distance them from the local community. The bank's traditional culture was still flourishing at the end of British rule.l Driven by Profits The Hongkong Bank had entered the 1950s with much the same treaty port business model as other major British firms. It preserved the same sort of prejudices against direct involvement with Chinese entrepreneurs, and it insulated its expatriate officers from the Chinese at large with a layer of local Portuguese staff who acted as interpreters and dealt with local customers in Hong Kong.2 As late as the 1960s, the bank's expatriate staff had no way of assessing proposals from Chinese businessmen, did not visit Chinese business premises and were as keen on obtaining full security for the bank's loans as any pawnbroker. Their superiors gave them little encouragement to form close contacts with the Chinese community or even to get heavily involved with Chinese businesses.3 During this period, like theJardine Group, the bank clung to a bias in favour of Shanghainese businessmen and was content to rely on intermediaries with a Shanghai background, like China Engineers, to procure clients in the manufacturing sector. It eventually appointed a Shanghainese textile tycoon to develop contacts with industrialists, even though the Cantonese were already dominating the manufacturing sector.4 The bank was just as unwilling as the rest of British business to promote Hong Kong staff to positions where they would share the same responsibilities as expatriates. One chairman claimed that Hong Kong employees were hard to groom for promotion because Chinese married men were not so ready to put business before their family lives.5 This perception was very strange since the Chinese billionaires that the bank was beginning to appoint to its board had no difficulty in recruiting Chinese talent prepared to make serious sacrifices to further their careers. Nevertheless, there were important cultural differences between the bank and the rest of the British business community. Most British firms were family owned or controlled, even...

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