11 November 2021

The Rubber Boom in Early Twentieth-Century Shanghai

Jiajia Liu, in her PhD thesis titled “Financial Capitalism on the Periphery: The Rubber Boom and Bust in Shanghai”, studies the relationships between Western and Chinese financial players in late Qing China. She digs into this research topic by conducting an in-depth study of an early twentieth-century speculative stock bubble that happened on the foreign Shanghai Stock Exchange.

How did you come to choose your research topic?

During my seven-year time living and studying in Shanghai, every time I passed by a historic building of Western-style in the Bund, I couldn’t help but wonder what happened behind the international scene. When I started my PhD programme in the Department of International History (now called “International History and Politics”) at the Graduate Institute, the department’s combined strengths in both international relations and economic history made it easier for me to locate Shanghai’s financial history in a global context. 

My research concerns a historical investigation into the rise and early development of financial capitalism in Shanghai, which had been largely unaffected by Western capitalism until Qing China’s defeat in the First Opium War with the British. Shanghai in 1842 became one of the first Chinese treaty ports opened to foreign trade and grew into the main international trade port and financial centre not only for China but also for the whole Asian region. Importantly, the foreign stock market in Shanghai during the late Qing dynasty represented the largest stock market of its time in the Far East. However, there has been a remarkable absence of literature on that foreign stock market and its institutional installation, namely the Shanghai Stock Exchange, established by foreign businessmen in Shanghai. This is largely due to the destruction of historical records during later war times. I, therefore, aimed to fill in this gap by an extensive consultation of multilingual research materials and the quantification of understudied financial information.

Can you describe your thesis questions and the methodology you use to approach those questions?

Broadly speaking, my thesis asks how Asia responded to Western financial capitalism. Concretely, it surveys the intertwining financial relationships between China and the West in the late Qing dynasty, as reflected in the financial capitalism developed against the background of the British speculation in rubber plantations and stocks in Asia. I used both quantitative and documentary evidence to unpack this big research question. In terms of quantitative methods, I digitised high-frequency price information of the Shanghai Stock Exchange to assess the Shanghai stock market during the rubber boom. Moreover, I compared the rubber boom in Shanghai with that in London to better identify the characteristics of the Chinese financial market. In terms of qualitative methods, I analysed primary and secondary sources in multiple languages on this research topic: Chinese, English, French, Japanese, and Portuguese. I believe that my research extensively bridges the scholarship across borders.

What are your major findings?

First of all, my research roots the treaty-port economy of Shanghai in the financial system of Qing China. It then presents the emergence of the speculation in rubber in global and local contexts, as well as in plantation and financial markets. The fundamental part of my thesis traces the price movements and international capital flows during the Shanghai rubber boom and bust. Detailed archival and financial data helped me anatomise the financial institutions and financial information that Chinese and Western investors relied on in forming the speculation during the rubber boom, as well as measure the viability of foreign rubber companies. At the same time, I also studied the financial crisis following the bust of rubber stock prices in Shanghai. The efforts to save the market mainly include the Qing government’s capital mobilisation and the British backstop to financial losses in Shanghai. In the end, I reexamined the relationship between the core and the periphery as revealed in the case of the Shanghai rubber boom and bust. 

On which research topics do you think your thesis might help shed a new light? 

Primarily, my thesis contributes to the literature on financial bubbles, stock exchanges, systemic crises, financial capitalism, and financial systems. What is more, it is an ambitious research project which takes an interdisciplinary approach at the crossroads of international relations, Chinese history, Asian history, colonial history, and commodity history. I also hope that my financial perspective on the relation between China and the West could shed light on approaches to Asian studies, and that my historical survey on the global rubber plantation, production and speculation could be applied to environmental studies.

What are you doing now?

I have been actively participating in leading international conferences in my research area, for example the International Symposium on Quantitative History in 2018, the International Convention of Asia Scholars in 2019 and 2021, and the World Congress of Business History in 2021. Next year, I will be presenting my work at the Association for Asian Studies’ Annual Conference, the Annual Pierre du Bois Conference Workshop, and the Business History Conference.

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Jiajia Liu defended her PhD thesis in International History and Politics in September 2021. Associate Professor Filipe Calvão presided the committee, which included Professor Gopalan Balachandran, thesis supervisor, and Edwin J. Beinecke Professor William N. Goetzmann, Yale School of Management, Yale University, USA.

Full citation of the PhD thesis:
Liu, Jiajia. “Financial Capitalism on the Periphery: The Rubber Boom and Bust in Shanghai.” PhD thesis, Graduate Institute of International and Development Studies, Geneva, 2021.

Jiajia Liu’s PhD thesis is not available for download yet. Please contact her for more information.

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Banner picture: excerpt from an illustration by aphotostory/