ABSTRACT
This chapter explores the rise of Shanxi merchants and their remittance business in the context of shifting political, economic, and social dynamics in China and the world from the eighteenth to the nineteenth century. The newly secured Sino-Russian borders of the early eighteenth century initially facilitated Shanxi merchants’ engagement in trans-Eurasian tea house trade, through which they built an extensive trading network and accumulated capital for their future banking business. Nonetheless, piaohao’s first major capitalist expansion did not take place until the early nineteenth century, when silver bullion became a preferred medium of exchange among inter-regional merchants as the result of the global silver trade. Meanwhile, the merchants’ demands for speedy credit instruments also increased at the height of domestic rebellions. The second major expansion of piaohao is ascribed to China’s integration into the new imperialist global trade order institutionalized in China after the mid-nineteenth century. As merchant-capitalists from the Chinese hinterland, piaohao’s banking empire played a dominant role in accelerating flows of capital and commodities between treaty ports and the interior. Piaohao’s development of symbiotic relations with the colonial banks doing business in China demonstrates that the capitalist market in the Chinese interior expanded rather than declined in the age of Western imperialism.
