The mainstay of the new China： stabilizing finance and managing foreign exchange.

After liberation, the Bank of China was reborn. From the earliest time when Shanghai was liberated, big slogans were hung on the Bund, to actively stabilizing financial prices at home, promoting the recovery of the national economy, and opposing blockades, embargoes and freezes abroad; From becoming a specialized foreign exchange bank in China, to strengthening the use of foreign exchange funds, supporting the construction of ocean-going shipping fleet, and trying to settle accounts with RMB to realize the preservation of export proceeds. China banks play a mainstay role in financial stability and foreign exchange work.

Return to the people’s arms

May 25, 1949, on the eve of the liberation of Shanghai. On the Bund, two 30-meter-long giant slogans are quietly hung on the outer wall of China Bank Building. One reads "Celebrating the Liberation of Great Shanghai" and the other reads "Welcome to the People’s Liberation Army". This is the first time that a big slogan to welcome liberation appeared on the Bund.

It was Ye Zisheng, an employee of the Bank of China, who wrote this slogan. Huang Shunfu, another BOC employee, risked being discovered by Kuomintang spies, gendarmes and patrols at any time and hung the slogan on the building.

It is precisely because many employees like Ye Zisheng have done a lot of preparatory work that the transfer of production, archives and account books has gone smoothly. It took only 10 days for the Bank of China, which returned to the people’s arms, to announce its resumption of business.

At that time, Bank of China had developed into a global bank with many overseas branches. On January 9, 1950, the Hongkong Branch telegraphed the General Management Office of Bank of China to accept the leadership. Subsequently, overseas institutions such as London Branch and Singapore Branch announced their acceptance of leadership.

In the process of Hong Kong Branch’s return to the motherland, Zheng Tieru, then branch manager, made great contributions. Thanks to his painstaking efforts, the Hong Kong branch had its own capital of over HK$ 60 million, which was not a small sum at that time. Faced with the intimidation and inducements of the Kuomintang authorities in Taiwan Province, he risked his life, calmly responded and made careful arrangements, and finally kept the foreign exchange. Part of the funds are lent to factories in Hong Kong, especially yarn mills, to support the industrial development in Hong Kong, while the other part is used to buy land and build a new Bank of China building. This building became the tallest building in Hong Kong at that time, and it was a symbol of the new China in Hong Kong, which laid the foundation for the Bank of China in Hong Kong for a century.

Premier Zhou Enlai has always been concerned about the operation of Hongkong Branch and the safety of Zheng Tieru. On March 11th, 1953, in order to make Zheng Tieru pay attention to the bank and his own safety, Zhou Enlai personally invited him to Beijing for an interview and hosted a family banquet. On December 16th, 1955, Zhou Enlai personally sent a letter to Zheng Tieru to express his condolences, in which he mentioned that "I hope to discuss with you ways to consolidate administrative affairs and defend state property". In 1956, after Zheng Tieru went to Beijing to attend relevant meetings, Zhou Enlai once again met him at his home in Xihuating, Zhongnanhai.

Stabilize financial prices

During the period of national economic recovery after liberation, according to the instructions of the Central People’s Government, the People’s Bank of China has done fruitful work in cracking down on the black market of gold, silver and foreign currencies, revoking the privileges of foreign banks in China, prohibiting the circulation of foreign currencies, unifying foreign exchange management, controlling inflation and stabilizing financial prices.

The Bank of China actively participated in this struggle and contributed to the recovery of the national economy. Among them, the General Management Office of Shanghai China Bank and Shanghai Branch received 5.3 trillion yuan of gold coupons within one week, accounting for about 15% of the total amount of 35.9 trillion yuan received by the city. Ranked first among the 216 banks and money houses participating in the redemption in the city.

At the same time, the black market of gold, silver and foreign currencies was banned, and related exchange work was carried out, and banking institutions in China all over the country successfully completed their tasks. Since June 10th, 1949, the General Management Office of China Bank has started the discount savings business in the branches in the liberated areas, which has played an important role in cracking down on speculation, stabilizing prices and ensuring people’s lives.

With the outbreak of the Korean War in 1950, the United States and other countries began to impose a comprehensive blockade and embargo on China. "This has had a very adverse impact on China’s foreign trade and foreign exchange work, which has just resumed soon. In order to break the situation, the Bank of China and the foreign exchange department jointly launched the struggle against blockade, embargo and freezing. " Wu Nianlu, former director of the Institute of International Finance of Bank of China, recalled.

Thanks to the joint efforts of banking and trade cooperation, this struggle has won victory, saved materials, revived purchase certificates, unfrozen funds, imported a large number of materials including strategic materials, solved the needs of domestic economic construction and strategic materials to resist US aggression and aid Korea, and promoted the development of China’s foreign trade.

Franchise in foreign exchange management

After the founding of New China, China Bank undertook unified foreign exchange management and became a specialized foreign exchange bank in China.

On April 6, 1950, the Foreign Business Department of the Head Office of the People’s Bank of China and the General Management Office of the Bank of China jointly worked, and the local BOC was changed into a component of the local People’s Bank.

After undertaking foreign exchange management, the foreign exchange funds of China Bank have been increasing since 1970s. Bank of China strengthened the use of foreign exchange funds, and from 1972 to 1976, it issued a total of 2.11 billion US dollars in foreign exchange loans, which strongly supported the national production and construction.

In 1963, the State Council decided to use the foreign exchange loan of Bank of China to purchase ocean-going ships. China has gradually established its own ocean-going fleet with considerable scale. From 1972 to 1976 alone, BOC provided a total of 880 million US dollars in foreign exchange loans for the construction of ocean shipping fleet. By 1976, there were 340 ocean-going ships with 5.56 million tons, including 262 loan ships with 4.6 million tons. The proportion of freight carried by China ocean-going fleet to the Chinese side increased from 13.3% in 1965 to 70% in 1976, which basically changed the situation of relying on renting foreign ships.

Moreover, after the western currency crisis in the 1960s, in March 1968, the Bank of China put forward the suggestion of using RMB to settle import and export trade in Hong Kong and Macao on a trial basis. On April 12th, the State Council approved the decision to start the trial use of RMB for settlement in Hong Kong and Macao in the spring of 1968.

Since then, the pilot scope of RMB valuation calculation has gradually expanded to Western European countries. By 1973, the number of countries and regions (including agreement countries) using RMB for settlement reached 63, and in 1976 it further increased to 120. In the spring and autumn of 1973, the turnover of RMB for export reached more than 2.4 billion yuan.

It was nine years from the trial and implementation of RMB-denominated settlement to 1976. At that time, when the international financial turmoil and the fixed exchange rate system of the international currency were on the verge of collapse, China used RMB to settle accounts abroad, which avoided and reduced foreign exchange risks, played a role in preserving the value of foreign exchange, and also improved the international reputation of RMB.

Zhou Enlai is very supportive of RMB pricing and settlement, and has instructed many times that "RMB will not go abroad, even in Hong Kong and Macao, and RMB will not circulate there", and "China’s trade with capitalist countries such as Britain, France, Switzerland and the Federal Republic of Germany is settled in RMB, which is a victory. We’re not trying to send RMB abroad. Our renminbi is creditable and stable, and it can be settled in renminbi. This is the result of socialist construction and is encouraging. "