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Shanxi merchants

Updated: 2013-02-05 15:02
( chinadaily.com.cn)

 
Editor's Note:

The Shanxi merchant group, from a region with a fair share of barren land, achieved commercial fame possibly even earlier than that of the Hui merchants.

Their trading routes, more in the North-South direction, extended nationwide and reached Russia through the caravan land-routes. But what brought them unprecedented prosperity was their nationwide money remittance service from the 19th century.

Legend has it that it all started around the 1810s when a paint and dye merchant started China's first piaohao, a banking firm that provided merchants and long-distance travelers with drafts that they could exchange for cash at a specified branch after reaching their destination, thus effectively reducing the cost and risk of carrying bulky metallic cash.

By the mid-19th century, dozens of piaohao firms based in three Shanxi counties were setting up branch offices throughout major commercial cities in China, and turning, of all the places in China,Pingyao, a remote, little-known city, into the financial hub of a nationwide network of money remittance.

After the turn of the century, they reached into Japan and Korea. Thus, for an entire century until the fall of the Qing kingdom in 1911, the Shanxi bankers had locked up the money transfer business in China.

 History

Hu Ping, president of the Chinese Business History Committee:

Once in feudal China there was a splendid period for business, though the whole business was not very well developed in China. Shanxi merchants, taking up the dominant position in the business sector, could be regarded as the leader of this period.

Fang Xing, a researcher of the Chinese Academy of Social Science's Economy Institute:

The merchants' diverse commodities, investment amount, and staff size were all at the top among all the business groups at that time.

Zhang Limin, a researcher with the Tianjin Academy of Social Science's History Institute: 

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 Culture

 

The culture of Shanxi merchants inherited various business experiences and entrepreneurship, and generated strong attraction and creativity in China's history of commercial culture.

The development of four families, the Wei, Wang, Liu, and Yang families in Shanxi Taiping, represented the energetic of culture of Shanxi merchants.

(1) Largeness and leniency

(2) Openness and tolerance

(3) Seeking commonness while reserving difference

(4) Persistence and initiative

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 Shanxi merchants' good faith 

Shanxi merchants believed that being faithful and honest were the best way to expand their market.

According to business ethics, merchants are driven by profits, yet cheating and fraud is not allowed.

In fact, faith and honesty has long been at the core of Shanxi merchants' value view. This is why they enjoyed their good reputation for such a long period.

(1)Chang's Family: Setting up stage in the year of natural disaster

(2)Rishengchang: The faith and honesty in the troubled times

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 How could Shanxi merchants thrive for hundreds of years?

How could Shanxi merchants stay at the top of China's business world throughout the Ming (1368-1644) and Qing (1644-1911) dynasties?

And why did so many Shanxi people take to business?

In a sense, this was determined by both geographical and historical factors.

At the same time, the spirit of Shanxi merchants was another important reason for their prosperity.

They showed no fear towards any kinds of difficulties, which were described by Western scholars as "the Spirit of Shanxi," or more precisely, "the Spirit of Shanxi Merchants."

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 Lei Lvtai- founder of the first bank 

Lei was born in a merchant family in Pingyao, when he was young, his family fell on hard times, he worked in various shops as a apprentice, Then he joined Xi Yu Cheng, a money shop, and was appriciated by Li (shop owner) who appointed him as the shopkeeper of the Beijing branch.

As Lei has realized the inconvience of transporting the sliver through long distance,and the cost of sliver exchange during export and import trade, Lei as a shrewd businessman, he also saw a business oppotunity.

Therefore, an idea gradually formed in his mind. He persuaded his boss to start a new business specializing in sliver exchange.In 1823, the very first private bank in China - Rishengchang (meaning the rising sun) was established.

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