East Asian Economic and Business History


Japanese banks in China

The current issue of The Economist has two stories about Japanese
banks. The article “Home and Away” shows how Japanese banks has
internationalised in recent years by expanding into the United States
and, more importantly, China. The article focuses on  Japan’s three
“megabanks”—Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group, Inc. (MHFG) and Sumitomo Mitsui Financial Group (SMFG).

The author of the article wrote,
Previous forays abroad  [by Japanese banks] have not ended well.
Japanese bankers have a reputation for arriving late, paying too much,
mismanaging things and then leaving with losses. Most analysts
(privately) say that success is no more likely this time round. The
top brass in Tokyo are too insular. Banks continue to parachute in
Japanese executives to run operations abroad rather than picking
talented foreigners. The megabanks promote their leadership in
formation from the various institutions out of which they were cobbled


This observation is very interesting. It suggests that Japanese culture and the unwillingness of Japanese Big Business to accept and exploit multiculturalism will hamper the efforts of Japanese firms to globalise. One of the reasons why London and New York have maintained their lead as financial service centres is that they are very open to immigration: the European Union, in particular, makes it easy for German or French workers to find employment in the City of London. These workers bring with them language and other soft skills that enrich the City. The United States, as the classic immigration society, benefits in a similar way. While some companies have begun to recruit foreign workers into management tracks, most Japanese firms remain insular in its attitude towards foreign workers and immigrants.  Employing foreign workers with the bilingualism and familiarity with the cultures of the booming economies of Asia will be crucial to Japan’s  success in banking and other service sector industries.


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Chinese Business in a Globalizing World: The Impact of the 1930s World Depression

Tim Wright, University of Sheffield

Globalization is nothing new, nor are economic crises.  Up to the late 1920s, the coastal areas of China were closely tied in to the world economy for many years, but this pattern was to some extent interrupted by the Great Depression, which had serious effects particularly on two of China’s staple exports, silk and soybeans. The Depression had, however, a very limited effect on total output in China, whether industrial production or GDP. It was nevertheless a very important event politically, and this was partly because of its effect on businesses in China, both foreign and Chinese owned. This presentation will argue that fluctuations in the value of China’s (silver) currency were crucial in determining the fate of business enterprises in this period. Specifically, those (Japanese-owned) business enterprises that used the gold yen suffered a sharp and catastrophic decline in their competitiveness from the very onset of the Depression in 1929. This brought forward a series of responses that culminated in Japan’s abandoning the gold standard and in the Japanese occupation of North-east China in 1931. In contrast, enterprises, whether Chinese- or foreign-owned, whose business was based on China’s silver-standard currency enjoyed a boom at the very time their Japanese competitors were suffering.  Their problems came in the mid 1930s when the value of China’s currency rose sharply against other currencies that had been taken off the gold standard. This led to a business crisis for these enterprises, whose manifestation was mainly in the form of falling profits rather than falling output. The government response involved a shift towards intervention in the economy on the part of the Nationalist state. The Nationalists’ currency reform was crucial to an improvement in the situation of the Chinese enterprises.

Click here for Tim Wright’s powerpoint presentation

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