Bank of China
Bank of China is one of the big four state-owned commercial banks of the People's Republic of China – the other three are Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China. Bank of China was founded in 1912 to replace the Government Bank of Imperial China, and is the oldest bank in China. From its establishment until 1942, it issued banknotes on behalf of the Government of the Republic of China along with the "Big Four" banks of the period: the Central Bank of China, Farmers Bank of China and Bank of Communications. Although it initially functioned as the Chinese central bank, in 1928 the Central Bank of China replaced it in that role. Subsequently, BOC became a purely commercial bank.
The return of Michael Geoghegan to Hong Kong in January is the latest chapter in HSBC's intimate association with China.
The bank's founder, Sir Thomas Sutherland, saw an opportunity to provide financing amid the booming China-Europe trade among companies that were dissatisfied with the operations and credit lines of existing banks. It became the leading financial institution in Asia and served as the bank of the Hong Kong government, opening branches across Southeast Asia after the first world war. It issued bonds for the Chinese government and major state corporations, including the railway system. In 1923, it opened its Shanghai headquarters, a six-storey, neoclassical building on the Bund. It was the largest bank building in East Asia and the second-largest in the world. It served as the branch from 1923 to 1955.
By the start of the Sino-Japanese war in 1937, the bank had 15 branches in China, from Harbin and Shenyang in the north to Shantou and Xiamen in the south. All were forced to stop operating during the war, except for a new branch in Chongqing, the wartime capital, which opened in 1943. Two senior managers died in a Japanese internment camp in Shanghai. The branches reopened after 1945.
The communist revolution was another heavy blow. All the branches closed except the one in Shanghai. Thousands of entrepreneurs fled the city to Hong Kong, where many continued the relationship they had with the bank in Shanghai; it made them and they made the bank. The bank was forced to give up its magnificent headquarters on the Bund, which became a government office, and move to two floors of a nearby building. The branch was managed by two foreign staff; it fell to one in the 1960s. In April 1955, the bank signed an agreement with the government in which it gave up all its assets in exchange for all its liabilities.
The Shanghai branch financed the mainland's foreign trade - 'bicycles to Pakistan, rosaries to Italy and pianos to Iceland', in the words of one manager - which earned enough to cover costs. During the Cultural Revolution, a 70-year-old retired British secretary was detained for several weeks and the branch manager could only leave the mainland when his successor was in place. The bank tried to close the branch, but did not receive permission. Throughout these difficult years, the bank retained a good relationship with Bank of China and was heavily involved in financing the mainland's foreign trade through Hong Kong.
After the Cultural Revolution, things began to return to normal. In 1979, the bank opened an office in Guangzhou, and one in Beijing in 1980, when it received permission to move tonnes of irreplaceable archives from Shanghai to Hong Kong. They cover the activities of the Shanghai branch dating back to the early 20th century and constitute the largest part of the bank's historical records.
The Shenzhen office opened in 1982 and the bank returned to other cities it had left 30 years before - Xiamen, Wuhan, Tianjin, Qingdao and Shenyang. In the 1990s, it entered negotiations with the Shanghai government to buy back its former building, less as a centre for modern banking than a symbol of its return to its past. The board declined the offer. 'We decided 'No', on the basis that we should always look forward,' Geoghegan says. 'This was a new China and we wanted to have a new building.'