Shanxi piaohao

• Chinese: 山西票号 (Shānxī piào hào)

Piaohao, which emerged chiefly in Shanxi province in the early Qing Dynasty, were one of two important precursors to modern banks in China, the other being merchant banks called qianzhuang. While the qianzhuang grew out of moneychanging operations (qianpu), and engaged in much typical local banking activities - providing loans, savings accounts with interest, and so forth - the chief activity of the piaohao was to facilitate the sending of remittances, that is, the sending of money, across the realm.

While qianzhuang were typically based only very locally, and were often run by a single family, or a close set of associates, piaohao maintained branches across the country, allowing money to be paid into one branch and withdrawn from another branch - essentially "sent" - without actual physical ingots of silver or strings of copper having to be arduously transported, under heavy guard, across great distances.

The precise origins of the piaohao are unclear, and money-order services, or remittance banks, may have existed in one form or another, at least in some regions, as early as the Ming Dynasty. However, by the 19th century, they were quite well-established and widespread, handling as much as half of all banking activity in the empire, until the establishment of an official modern postal service in the 1890s took over their role as a remittance service. Piaohao even came to serve many official purposes, such as sending tax payments to political centers, distributing officials' salaries, and making loans to the government.

Before the piaohao died out in the early decades of the 20th century, they saw such success that some expanded overseas, establishing branches in Russia, Japan, and Singapore.

References

• Lloyd Eastman, Family, Fields, and Ancestors: Constancy and Change in China's Social and Economic History, 1550-1949, Oxford University Press (1988), 112-114.