Chapter 3 explores the growing role foreign banks and global capital markets played in Chinese public finance during the 1890s. It does so by focussing on the indemnity loans China issued on foreign bond markets between 1895 and 1898 to repay the war indemnity imposed on China by Japan after the Sino-Japanese War of 1894/5. The chapter shows how increasing competition among foreign financiers and banks involved in China made it possible for China to borrow money cheaply abroad. However, once China’s Customs revenue was used up as a possible security for loans, foreign bankers needed to learn about other Chinese revenue streams and China eventually had to give in to the rules of foreign financial markets when it issued the final indemnity loan. More broadly, the indemnity loans also reflected the growing internationalization of Chinese public finance.