Investing in the New Republic: International Finance and the 1911 Revolution in China

• In Event: Rethinking Debt in Modern China: Chinese Foreign and Domestic Debt from the Late Qing Dynasty to the War of Resistance

Abstract

The last two decades of the Qing dynasty saw a rapid growth in China’s engagement with foreign financial markets and an increased reliance of Chinese public finance on foreign capital. In Europe, a market for Chinese bonds emerged and investors there followed political developments in China closely to assess the credit of the Chinese state. While previous scholarship on the 1911 revolution has mainly focused on its political side, this paper shows the crucial influence these international financial connections had on the outcome of the revolution and the establishment of the new republic. It first explores how different Chinese political factions during the revolution tried to win the support of foreign bankers to secure financial help. It then describes the measures Western bankers took to stabilise the price of Chinese bonds on foreign bond markets and maintain China’s credit abroad during the revolution. Finally, it demonstrates that the decision of foreign bankers to first remain neutral during the revolution and then financially support the new government of Yuan Shikai was an important factor in Yuan’s ability to emerge victorious after the fall of the Qing dynasty. This paper argues that it were the measures taken by foreign bankers to maintain China’s credit and the support of these bankers for the new republic that enabled China to raise sufficient capital abroad to keep the new republic afloat after the revolution. However, this also meant that the reliance of the Chinese state on foreign capital continued into the Republican period.

Author

• Ghassan Moazzin, University of Cambridge