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After the Opium War in 1842, Shanghai and Hong Kong soon became the pioneers of China's modernisation. Today, the two cities are the most advanced financial centres in the nation.
To enable the public to get a better idea of how the two cities became the world's financial centres under different historical circumstances, the Hong Kong Museum of History and the Shanghai Bank Museum have collaborated for the first time on organising a large-scale exhibition, entitled "The Development of Banks in Shanghai and Hong Kong", which tells the story of the banking industry in both cities and their long history of cooperation in trade and commerce.
Jointly presented by the Leisure and Cultural Services Department (LCSD) and the Industrial and Commercial Bank of China Limited (ICBC), the exhibition will be held at the Museum of History from tomorrow (November 28) to March 24.
The exhibition's opening ceremony was officiated today (November 27) by the Chief Executive, Mr Donald Tsang. Other officiating guests were the Deputy Director of the Liaison Office of the Central People's Government in the HKSAR, Ms Guo Li, the Chairman of ICBC, Dr Jiang Jianqing, the Chief Executive of the Hong Kong Monetary Authority, Mr Joseph Yam, the Permanent Secretary for Home Affairs, Mrs Carrie Yau Tsang Kai-lai, the head of the Shanghai regional headquarters of ICBC, Mr Sun Chiping, the Director of LCSD, Mr Thomas Chow, and the Managing Director and Chief Executive Officer of ICBC (Asia), Mr Zhu Qi.
Speaking at the opening ceremony, Mrs Yau noted that the exhibition would not have been possible without the support of ICBC, who had suggested that its Shanghai Bank Museum, the first of its kind in China, organise the exhibition with the Museum of History to showcase the development of the banking industry in the two cities in their respective social, economic and cultural contexts, thus fostering better mutual understanding.
Alongside the exhibits from Shanghai, some 200 artefacts from the Museum of History are also on display. They include banknotes, share certificates, receipts, savings boxes, deposit books, bank equipment and souvenirs. Significant exhibits include the bronze lion originally guarding the entrance of HSBC's Shanghai branch, an old bookkeeping machine with functions of calculation and memory storage, a banknote binder with lever mechanics, a reconstruction of a Shanghai native bank and a savings office of the People's Bank of China, a six-billion-yuan banknote which is the largest denomination of banknote in the history of Chinese currency, and the first set of renminbi banknotes.
Divided into six sections, the exhibition traces the history of the banking industry in both cities from the rise of early native banks, the arrival of foreign-funded banks, the birth of Chinese-funded banks, and the financial industry in the two cities during the Sino-Japanese War, to the development of the banking industry around 1949 and during the period under China's economic reforms.
Before the emergence of banking institutions, basic financial services in China were provided by qianzhuang (money shops) and yinhao (money changers), which were known as native banks. They sprang up during the late Ming and the early Qing dynasty. Currency exchange was their main business; later they started to accept cash deposits, extend loans, issue credit receipts and private notes and remit funds from one region to another. They relied heavily on personal relationships based upon friendship, connections and the trust between the clients and the proprietor.
The outbreak of the Opium War in 1840 opened a new chapter in Chinese history. The defeated Qing government ceded Hong Kong Island to Britain, and agreed to open Guangzhou, Fuzhou, Xiamen, Ningbo and Shanghai as designated trading ports. Following Hong Kong's opening up in 1841, Shanghai was declared a free port and formally opened to foreign trade in 1843. Foreign merchants, missionaries and diplomats soon began pouring into Shanghai and Hong Kong, accompanied by British-funded banks, which were the first to operate in both cities.
In 1847, the British-funded Oriental Bank Corporation became the first foreign bank to open in Shanghai. By 1927, there were 35 foreign-funded banks operating in Shanghai. Through their activities, the banks eventually controlled the China trade, China's financial system, customs revenue and national budget.
The Oriental Bank, which had its headquarters moved from Mumbai, India, to London in 1845, set up its branch in Hong Kong in the same year and was authorised by the government to issue banknotes. In 1865, the Hong Kong and Shanghai Banking Corporation was established. Since then, it has assumed an indomitable business presence in both cities. As commerce and trade developed further in the late 19th and early 20th centuries, more and more foreign-funded banks set up branches in Hong Kong.
The rapid growth in the re-export trade and the economy led to a soaring demand for capital. The native banks could no longer meet the needs of industrial and commercial enterprises in terms of their scale, capital accumulation and accounting practices. Chinese-funded banks modelled after Western management and operation practices soon set up to meet the new demands. Some of them were even transformed from the early native banks. By 1925, the gross assets held by Chinese-funded banks in Shanghai had exceeded those of the foreign-funded banks. During the 1920s and the 1930s the banking industry prospered in both cities.
In 1949, the People's Republic of China was established and adopted a highly centralised and planned economic system. The banking industry became uniform and non-competitive. As a result, Shanghai's status as a financial centre was soon eroded.
Continuing to function under a market economy, Hong Kong began to emerge as the Asia Pacific's financial centre in the 1960s. Many mainland families and merchants, mostly from Shanghai, moved to Hong Kong during the civil war in 1946. With the influx of capital, various kinds of banks sprang up in the late 1940s. The Hong Kong government introduced the first Banking Ordinance in 1948 and 143 banks were licensed in Hong Kong. A number of modern banks were established in quick succession.
Following the end of the dominance of the banking industry by the People's Bank of China in 1979, a number of commercial and integrated banks resumed operations or were established. In 1992, the Report of the Central Committee to the 14th National Congress of the Communist Party of China proposed to grant Shanghai the important role of being China's bridge to and window on world finance. Meanwhile, the development of the Pudong district has also brought further opportunities for Shanghai's financial industry. By the end of 2006, Shanghai was home to the headquarters of three Chinese-funded banks as well as about 3,000 other Chinese-funded financial institutions, and a number of foreign-funded financial institutions and legal persons. In terms of the number, kind and distribution of financial institutions, 21st-century Shanghai has surpassed by far its heyday as the financial centre of the Far East in the 1930s.
In Hong Kong, the government re-issued banking licences to foreign-funded banks in 1978. As a result, a large number of international banks entered the Hong Kong market. Judging from the number of banks registered overseas, Hong Kong had become one of the largest international financial centres by the middle of the 1980s. It was not long before the Bank of China Group established its presence in Hong Kong. In 1994, the Bank of China became Hong Kong's third note-issuing institution alongside HSBC and Standard Chartered Bank. With mainland Chinese banks listing on the Hong Kong Stock Exchange, Hong Kong and Mainland China's financial markets have become more closely intertwined than ever.
To enhance visitors' understanding of the exhibition, public guided tours and audio guide services will be provided. The Museum of History has also organised a number of educational activities including lectures, a forum and workshops. For details please visit the museum's website. An illustrative catalogue has also been produced for the occasion and is available at the museum's gift shop.
Located at 100 Chatham Road South, Tsim Sha Tsui, Kowloon, the Museum of History opens from 10am to 6pm from Monday to Saturday and from 10am to 7pm on Sundays and public holidays. It will close at 5pm on Christmas Eve and Chinese New Year's Eve. It is closed on Tuesdays (except public holidays) and the first two days of the Chinese New Year. Admission is $10 with half-price concession available for senior citizens aged 60 and above, full-time students and people with disabilities. Admission is free on Wednesdays.
For details, please visit the Museum of History's website at http://hk.history.museum or call 2724 9042.
Ends/Tuesday, November 27, 2007
Issued at HKT 17:01
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