Led by Professor Chicheng Ma, the Financial History, Trade and the Rise of Hong Kong Research Cluster analyses the impact of Confucian and institutional factors on financial markets, their interaction with modern institutions and laws, and Hong Kong's emergence as a global financial centre.
Many of the issues studied in the above clusters are related to financial development, both historically and today. Although China’s financial development can be traced back 3,000 years or more, insurance, modern banking and securities markets did not emerge until the late 19th century. The Financial History, Trade and the Rise of Hong Kong Research Cluster investigates whether the aforementioned Confucian and institutional factors inhibit financial markets and how these historical fundamentals interact with modern institutions and laws to affect future financial development. To answer these questions and study China’s developmental experience (or the lack thereof) in finance, our members use the datasets and insights from the other three clusters and construct or expand several key databases. We also address how Hong Kong became an important financial centre and how it can maintain its international status as such and as Asia’s global city in the future.
China’s center of socioeconomic activities was in the North prior to the Tang dynasty but is in the South today. We demonstrate that Arab and Persian Muslim traders triggered that transition when they came to China in the late seventh century, by lifting maritime trade along the South Coast and re-creating the South. Between 742 and 1393 CE, prefectures with better access to maritime trade, or higher porcelain trade participation, experienced significantly higher population growth, but the predictive coefficient weakened substantially after the maritime trade ban of 1371 CE. These findings are robust after controlling for many confounding factors.
The primary challenge to assessing the legal origins view of comparative financial development is identifying exogenous changes in legal systems. We assemble new data on Shanghai’s British and French concessions between 1845 and 1936. Two regime changes altered British and French legal jurisdiction over their respective concessions. By examining the changing application of different legal traditions to adjacent neighborhoods within the same city and controlling for military, economic, and political characteristics, we offer new evidence consistent with the legal origins view: the financial development advantage in the British concession widened after Western legal jurisdiction intensified and narrowed after it abated.
