The unstable banking sector presents great challenges to the economy in contemporary China: state-owned banks carry large portfolios of non-performing loans and China's increasingly affluent population produces a rising flow of deposits, but foreign banks are still seriously restricted in their ability to take deposits. Two recently published monographs on the history of banking in modern China put current economic and financial reforms in context by explaining the historical development of modern Chinese banks, their management, and political manoeuvres, especially in the old and new financial capital of China, Shanghai.In Banking in Modern China, Linsun Cheng focuses on banking institutions from the founding of the first modern Chinese bank in 1897 to the beginning of the Japanese invasion and occupation in 1937. During those 40 years, China encountered many political and economic crises impacting on the growth of banks. Whereas earlier studies have to some extent acknowledged the achievements of modern Chinese banks during the Republican period, Cheng's contribution lies in the documentation and analysis of these banks' financial performances, managerial structures, and business practices based on previously inaccessible archival records and bank documents held in Shanghai and Nanjing.
