banking

Pingyao – the forgotten banking hub of the Qing dynasty

How things change. The places we associate with finance in today’s China are Shanghai and Hong Kong, but in the first half of the 19th century, the finacial centre lay was Pingyao [平遙], a town in Shanxi: it was here that Rishengchang Draft Bank [日昇昌票號] issued China’s first cheques in 1823. For a brief moment, Pingyao was the Qing Empire’s financial hub. Last week, The Economist published an article about the town then and now:

The city lay on the path of a lucrative trade route. The bank’s manager spied a business opportunity when he saw silver shipments passing each other in opposite direction. He replaced pricey security, wagons and pack animals with a clearing house.

The bank spawned around 50 competitors across Shanxi (nearly half in Pingyao) with hundreds of branches across the empire. At the time Chinese bankers were held in lower esteem than peasants and tradesmen. They tried to keep staff honest by making them pledge their homes and even to surrender their families as slaves if they committed fraud; investors had no control over the banks’ daily operations.

Pingyao’s old town centre is now listed as a UNESCO World Heritage Site.