1927 Guangzhou government war bond

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This bond was issued by the Finance Minister of the Kuomintang Party, which was then trying to establish a national government based in Guangzhou prior to the establishment of the Republic of China (click photo to enlarge). Valued at 10 yuan, and issued on February 1, 1927, it was intended to raise money for the war effort against the northern warlords operating in China at that time and support the de facto government’s push to unify the country using the Canton provincial tax base as a mortgage. This bond was fully tradable, and provided a yield of 8 percent per annum for nine years from February 1, 1928, collectable annually from the Central Bank of China, expiring on February 1, 1937. Although he had died two years earlier and been replaced by Chiang Kai-shek, Sun Yat-Sen’s image as the founder of the Kuomintang is in the top right corner. Bonds to the value of 9,900,000 yuan were issued. It is unlikely these were ever redeemed due to the struggles the Kuomintang were soon to be involved with the newly emerging Communist Party (whose own Long March took place the same year as this bond issue) and the onset of World War II which further plunged China into chaos.

This China cultural article is one of a regular series we are running at China Briefing. Conducting business in China is more than just legal and tax advice, one has to “feel” the country and its rhythms as well in order to properly advise clients on conducting business in this massive country. These China cultural articles are intended to assist with a greater business understanding of the background to doing business in China, and are provided by the research team at Dezan Shira & Associates. To view the China business cultural archives, please click here.