History of Banking in China：Entry of Foreign Banks
British and other European banks entered China around the middle of the nineteenth century to service the growing number of Western trade firms. The Chinese coined the term yinhang (银行), meaning "silver institution", for the English word "bank". The first foreign bank in China was the Bombay-based British Oriental Bank (东藩汇理银行), which opened branches in Hong Kong, Guangzhou and Shanghai in the 1840s. Other British banks followed suit and set up their branches in China one after another. The British enjoyed a virtual monopoly on modern banking for forty years. The Hong Kong and Shanghai Banking Corporation (香港上海汇丰银行), now HSBC, established in 1865 in Hong Kong, later became the largest foreign bank in China.
Bank notes of Hong Kong and Shanghai Banking Corporation
In the early 1890s, Germany's Deutsch-Asiatische Bank (德华银行), Japan's Yokohama Specie Bank (横滨正金银行), France's Banque de l'Indo-Chine (东方汇理银行), and Russia's Russo-Asiatic Bank (华俄道胜银行) opened branches in China and challenged British ascendancy in China's financial market. By the end of the nineteenth century there were nine foreign banks with forty-five branches in China's treaty ports.
Bank notes of France's Banque de l'Indo-Chine
Foreign banks enjoyed extraterritorial rights. They also enjoyed complete control over China's international remittance and foreign trade financing. Being unregulated by the Chinese government, they were free to issue banknotes for circulation, accept deposits from Chinese citizens, and make loans to the qianzhuang.