Communist banks in liberal Hong Kong

Damian Tobin of SOAS has a new article at the JCA website. “Continuity and Pragmatism: How Chinese State-Owned Banks adapted to Hong Kong’s Free Market (1949–1978)” (DOI: 10.1080/00472336.2015.1123283), examines the puzzle of how China’s post-1978 economic reforms saw its enterprises quickly adapted to the new capitalist business environment.

In this article, Tobin provides insights from Chinese state-owned banks in Hong Kong, examining how, from 1949 to 1978, these banks, led by the Bank of China, “represented China’s primary financial interface with the outside world.” While loyal to communist values, “the Bank of China demonstrated extraordinary business pragmatism in its engagement with the international financial system. It also exemplified a high level of management continuity which enabled it to see beyond a volatile and often hostile political environment.”

The article also shows that the post-1978 retreat from ideology and its replacement with commercial incentives proved costly in terms of professional standards and loyalty to the Communist Party. The article demonstrates the long-term importance of Hong Kong’s role in the internationalisation of China’s business and financial sectors.

Source: Communist banks in liberal Hong Kong

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