ABSTRACT
Chapter 2 examines piaohao as capitalist banking firms by historicizing the following elements of remittance banking—interfirm competition, capital, risk management, the business coalition, and bookkeeping—in nineteenth-century China. It argues that although piaohao as family firms of nineteenth-century China differed from modern banks and business corporations in many ways, their theory and practice of kinship-based capital raising, risk-averse business management, and financial coalition were the best economical solutions in the pre-information age and had many similarities to those adopted by their global counterparts. Furthermore, the dual-entry bookkeeping system of piaohao kept effective track of profit and loss and was one of the most advanced bookkeeping methods against the backdrop of remittance banking and bimetallism in late imperial China. The analysis of piaohao’s business from a microeconomic lens testifies to Chinese hinterland capitalism as a successful local history of global capital.
