Historical Studies (Chinese Edition)

No.5, 2013

 

Banking Restructuring during the Economic Crisis of the 1930s: An Examination Centered on the Bank of China and the Bank of Communications                     

(Abstract)

 

Pan Xiaoxia

 

In early 1935, an economic panic occurred in Shanghai. Its root was not in the real economy, but in excessive speculation in real estate due to an influx of hot money. This led to the bursting of the bubble and triggered a financial crisis which spread to the industrial sector and resulted in a market panic. Fortunately, this did not affect the overall pattern of economic operations. For the National Government, this presented an opportunity as well as a threat. Seizing the bailout option, it restructured the Bank of China and the Bank of Communications to expand state credit. This effort achieved its goal to some extent; the government realized its intention of controlling the financial sector, paving the way for its later uniform control.