Pingyao preserves city walls, streets, and traditional buildings. Commercial activity during the Ming and Qing was closely connected to the development of its remittance houses. These firms used credit and accounting to transfer funds between locations. Merchant networks linked the ancient city's history with much wider regions.
Historical background
Pingyao, officially Pingyao Ancient City, is a walled city in central Shanxi, China, famed for its importance in Chinese economic history and for its well-preserved Ming and Qing urban planning and architecture. It is the only walled city seat in China to survive with both its historic street plan and its original building fabric substantially intact. The greater part of the city's courtyard dwellings, shopfronts and temples are ancient structures surviving in situ rather than modern reconstructions. Administratively, it comprises the town of Gutao in Pingyao County, Jinzhong.
Pingyao's surviving street plan and buildings are especially associated with the Ming and Qing periods, while its historical traditions reach further back. The earthen defenses attributed to an early settlement and the later walled city's fabric belong to different stages of its development. Its importance to economic history became particularly visible through the financial institutions established there. A local town could thus become the headquarters for firms whose operations extended well beyond the surrounding region.
History
There was already a settlement in place at Pingyao by the reign of the Xuan King (r. c. 827 – c. 782 BC), when the Zhou raised earthen ramparts around the site. In the Spring and Autumn period, the county belonged to the kingdom of Jin. It was part of the kingdom of Zhao in the Warring States period. Under the Qin, it was known as Pingtao. During the Han dynasty, it was known as the seat of Zhongdu County.
Pingyao served as the financial center of the region from the 16th century and of the entire Qing Empire during the late 19th century. During those times, there were more than 20 financial institutions within the city, comprising more than half of the total in the whole country. Rishengchang was the first and largest, controlling almost half of China's silver trade under the late Qing before going bankrupt in 1914 in the aftermath of the Xinhai Revolution. Organized restorations have been undertaken periodically since the 15th century, the most recent phase beginning in 1979. In 1986, China designated Pingyao as one of the Chinese Historical and Cultural Cities. In 2004, part of the southern walls collapsed. In 2015, Pingyao ancient city became a national 5A-class tourist attraction.
Historical background
Piaohao, also known as piaozhuang, huihao, or huiduizhuang, in Mandarin Chinese, or Shanxi banks or Shansi banks in English, were a type of bank that existed in China during the Qing dynasty until approximately 1952.
The piaohao were started by merchants from the province of Shanxi who were often originally engaged in other businesses before they entered finance. The piaohao were mostly active in northern China while the qianzhuang were mostly active in the south. The piaohao continued to be the dominant financial institutions of China until 1900 when more modern commercial banks started being created by both the imperial and provincial governments, and the qianzhuang benefitted more from their close ties with foreign banks operating in Chinese treaty ports. During their heyday the piaohao had over 400 branches operating across the territory of the Qing dynasty and branches in other countries like Japan, Korea, Russia, India, and Singapore.
After 1912 practically all piaohao either closed or were transformed into more modern types of banks. They continued to exist during both the early Republic of China and the People's Republic of China until they were all finally nationalized alongside the qianzhuang and the rest of the Chinese financial industry in 1952.
Structure and business strategies
All piaohao were organized as single proprietaries or partnerships, where the owners carried unlimited liability. They concentrated on interprovincial remittances, and later on conducting government services. From the time of the Taiping Rebellion, when transportation routes between the capital and the provinces were cut off, piaohao began involvement with the delivery of government tax revenue. Piaohao grew by taking on a role in advancing funds and arranging foreign loans for provincial governments, issuing notes, and running regional treasuries. The business model of the piaohao gave very little protection to the capital of the shareholders; furthermore, the piaohao imposed a highly centralized management structure, and a tenure- and performance-based incentive structure which was used to discipline distant employees in faraway branches.