History of Banking in China：Private Banks & Golden Age of Chinese Banking
Three private banks appeared in the late Qing period, all created by private entrepreneurs without state funding. The Xincheng Bank was established in Shanghai in 1906, followed by the National Commercial Bank in Hangzhou the following year, and the Ningbo Commercial and Savings Bank (四明银行) in 1908. In that year, the Regulations of Banking Registration was issued by the Ministry of Revenue, which continued to have effect well after the fall of the Qing dynasty.
A lion's share of the profitable official remittance business was taken by the Daqing Bank from the piaohao. The piaohao all but disappeared following the Xinhai Revolution in 1911.
The same period saw the increasing power of private interests in modern Chinese banking and the concentration of banking capital. In Shanghai, the so-called "southern three banks" (南三行) were established. They were the Shanghai Commercial and Savings Bank (上海商业储蓄银行), the National Commercial Bank (浙江兴业银行), and the Zhejiang Industrial Bank (浙江实业银行). Four other banks, known as the "northern four banks" (北四行) emerged later. They were the Yien Yieh Commercial Bank (盐业银行), the Kincheng Banking Corporation (金城银行), the Continental Bank (大陆银行), and the China & South Sea Bank (中南银行). The first three were initiated by current and retired officials of the Beijing government, whilst the last was created by an overseas Chinese.
Bank note of the China & South Sea Bank
Note suspension incidentIn 1916 the Republican government in Beijing ordered the suspension of paper note conversion to silver. With the backing of the Mixed Court, the Shanghai Branch of the Bank of China successfully resisted the order.
The Bank of China's bylaws were revised in 1917 to restrict government intervention.
Golden Age of Chinese banking
The decade from the Northern Expedition to the Second Sino-Japanese War in 1937 has been described as a "golden decade" for China's modernisation as well as for its banking industry. Modern Chinese banks extended their business in scope, making syndicated industrial loans and offering loans to rural areas.
The Nationalist government created the Central Bank of China in 1928, with Song Ziwen as its first president. The Bank of China was reorganised as a bank specialising in the management of foreign exchange while the Bank of Communications focused on developing industry.
The Bureau of Financial Supervision was set up under the Ministry of Finance, to supervise financial affairs.
Confronted with imminent war with Japan, the Chinese government took control of over 70 percent of the assets of modern Chinese banks through the notorious banking coup.