West German Banks’ Entry in the People’s Republic of China and the Role of Hong Kong, 1949-1989 – the Cases of Deutsche Bank, Commerzbank, and Dresdner Bank

• Applicant: Professor Dr. Dieter Ziegler
• Subject Area: Economic and Social History
• Term: since 2022
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 508464250

The purpose of this project is to map out the paths of the three German great banks (Deutsche Bank, Commerzbank, Dresdner Bank) to Hong Kong and the People's Republic of China (PRC) from the 1950s to the 1980s, so as to (1) identify the significance of Hong Kong’s rise as a financial center for the leading banks of a (global) trading nation – in this case the ‘great banks’ of the Federal Republic of Germany, (2) to examine the role of the Crown Colony as a springboard for business with the PRC, and (3) to identify the changing strategies and business models of the banks vis-à-vis Hong Kong and the PRC. Methodologically, this is first and foremost a study in business history: Based on the internal documentation of the three German great banks, deposited at the Historical Archives of Deutsche Bank and Commerzbank in Frankfurt, the project aims to define their business models, compare the developments of the three banks and cross-check the banks' interpretation of Chinese policies with Chinese primary sources to uncover the possible link between the socio-political environment and the banks' strategies. The period under review was characterised by a slow start, but then rapidly growing interest of German banks in business in China, with the Crown Colony of Hong Kong itself playing an essential role as a developing financial center, but also as the "hinge" of the People's Republic with the "West", which quickly grew in importance for Germany as an export nation. In this context, the German banks faced seemingly overpowering competition from British banks in Hong Kong, which had never completely lost contact with the People's Republic and gained access to this market earlier than their competitors. This difficult starting position may have led to the German banks initially acting together in the 1950s (through the Deutsch-Asiatische Bank, which was dominated to a large extent by Deutsche Bank), but then separating from the 1960s onwards and going their own ways, Deutsche Bank even at times with European partners (European Asian Bank). Since the beginning of the 1980s, it has been possible to set up representative offices in the People's Republic, which the three banks used almost simultaneously to act as a "hinge" for German clients interested in doing business in China. As the Chinese market was largely unknown territory for most German companies, not only but especially for small and medium-sized enterprises, they were essentially dependent on information about opportunities and risks, which their house bank was supposed to provide.

• DFG Programme: Research Grants