The Luxembourg-based bank BGL BNP Paribas celebrates its centenary! Over a period of 100 years,...
A little bit of history…
At the turn of the 20th century, three banks that were forerunners of the BNP Paribas Group organised the financing of one of the largest public works projects of the time: the construction of the railway line from Hankou to Beijing, covering a total distance of 1,200 kilometres. These banks were Société Générale de Belgique (now BNP Paribas Fortis), Banque de Paris et des Pays-Bas, and Comptoir National d'Escompte de Paris.
The project was completed in seven years (1898 – 1905), and was entrusted to a subsidiary company, the Société d'étude de chemins de fer en Chine (the Society for the Study of Railways in China). It operated in a complex geopolitical environment, given the domestic situation in China and the pressure being exerted by the major Western powers. For strategic reasons, a line needed to be built between Beijing and Hankou, on the Yangtze River. The major rivers in China flow from east to west, and a north-south route was considered indispensable for trade, especially for foodstuffs such as the rice and sorghum produced in the fertile plains of the south.
The Chinese wanted to do business with a country that was prepared to grant disinterested cooperation, or that would at least be less prone to take advantage of the construction of the railway to gain economic or territorial concessions. That country was Belgium. In November 1896, the first diplomatic contacts took place in Beijing between the imperial government and the Belgian ambassador. Belgium's leading bank, Société Générale de Belgique, was contacted. However, its management was divided as to the line to take, given the size of the sums that needed to be advanced and the geopolitical risks.
Société Générale de Belgique therefore came to an agreement with Banque de Paris et des Pays-Bas to share the risks and rewards of the contract. This intervention by Paribas placed the huge resource of French savings at the service of the project. It was agreed that the two banks would share the financing, with two-fifths being provided by the Belgian partners and three-fifths by the French, and that orders for equipment, which represented a significant benefit for the industries of both countries, would be shared equally. On 3 March 1897, the two companies established the Société d'étude de chemins de fer en Chine.
Negotiations and project feasibility studies lasted throughout 1897, and with the intervention of the Belgian consul in Hankou, Émile Francqui (1863-1935) and the French consul in Shanghai, Paul Claudel (1868-1955) in particular, the project could begin. Beginning in March 1899, the line was ‘attacked from both ends' at once, so that by the end of the year, 20 kilometres of railway had been laid in the south and the embankments completed along a 100-kilometre stretch. On the northern section, 60 kilometres of embankments and 10 kilometres of railway were finished.
After a number of difficulties, the line was inaugurated on 14 November 1905. It covered 1,214 kilometres and included 125 stations. Its rapid construction had cost 200 million gold francs, making this one of the least expensive lines built in China during the first decade of the 20th century.
At the same time – and not by chance – Société Générale de Belgique established a banking subsidiary in the Middle Kingdom: the Banque Sino-Belge, which opened its first branch in Shanghai. It dealt with exchange transactions, arbitrage, secured loans, import-export financing, and similar transactions.
This exhibit has been realized by Archives et Histoire - Groupe BNP Paribas and Arts Collection & Historical Archives BNP Paribas Fortis
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