This article provides the first in-depth systematic comparison of foreign banking in pre-World War I China and Japan. As the article shows, after their entry into China and Japan, the presence and activities of foreign banks in China and Japan differed markedly, with these banks developing a much more prominent position in China. Making use of sources in German, English, Chinese, and Japanese, this article aims to explain why foreign banks in China and Japan developed so differently before World War I. It does so by first providing an overview of the development of foreign banks in both countries and then discussing their activities and development with regards to Chinese and Japanese financial institutions, trade finance, and public finance. The article shows that it was Japan's emphasis on financial reforms that led to the limited presence of foreign banks in that country.
