Shanxi merchants
At the beginning of Ming dynasty, the newly established government was in constant fighting with the remnant of the expelled Mongolian armies, along the northern border.
[1] During the Republic of China period, the Qing Shanxi merchants based on conventional draft banks and tea trade had largely fallen.
The prominent example of Shanxi merchants during this time is H. H. Kung, who was highly influential in determining the economic policies of the Kuomintang-led Nationalist government.
Shanxi merchants were active for more than five hundred years from the early Ming dynasty, creating centuries-old prosperity, leaving significant business and cultural legacies.
From the time of the Taiping Rebellion, when transportation routes between the capital and the provinces were cut off, piaohao began involvement with the delivery of government tax revenue.
Piaohao grew by taking on a role in advancing funds and arranging foreign loans for provincial governments, issuing notes, and running regional treasuries.
Although some of them did eventually seek higher social status by joining the Chinese bureaucratic system, and combined the business network and wealth with political power.
From the time of the Taiping Rebellion, when transportation routes between the capital and the provinces were cut off, piaohao began involvement with the delivery of government tax revenue.
Piaohao grew by taking on a role in advancing funds and arranging foreign loans for provincial governments, issuing notes, and running regional treasuries.
[2] During the Mongol Empire and Yuan dynasty, the Golden Horde and Chagatai Khanate ruled over the lands of Central Asia and further west, leading to the creation of prosperous business cities like those in Samarkand, Uzbekistan.
During this time, the Silk Road was unified under one power, and traders like Marco Polo and Ibn Battuta across Eurasia could travel peacefully.
However, after Mongol Empire was succeeded by several smaller states over the centuries, the overland Silk Road had become splintered and less used due to deterioration and political destabilization.
The Qing army leveled all buildings and removed all residents of the area inland in three days, a move done to isolate Southern Ming dynasty rebels on Taiwan.
[4] The quarantine band around the Chinese coast which was marked with signs stating "anyone found over this line shall be beheaded instantly", was thoroughly patrolled by the military of the Qing dynasty and the affected area was widened a total of three times.
[4] This very limited form of international trade along some parts of the Chinese coast was ended when, in the year 1757, the Qianlong Emperor had closed off all of these port cities to foreigners once again.
[4] During this era foreigners doing business in China risked unpredictable fines imposed on them by corrupt government officials, enthusiastic torture, imprisonment based on arbitrary accusations, and instant death until the year 1842, this was when the British were victorious in the First Opium War.
[4] By the mid-1800s Shanxi merchants were selling long Boyar caravans full of exported goods that headed to St. Petersburg for resale to the rest of Europe and the Americas.
[4] Both the Russians and the Shanxi merchants benefitted greatly from this trade until the Qing was forced to open up several of its port cities following its defeat in the Opium Wars.
Randall Morck and Fan Yang claimed that Li Daquan deliberately omitted saying that his ideas that established the piaohao were of European origin as an extreme culture of xenophobia existed in the Qing dynasty at the time.
[4] The most plausible explanation of the financial prominence of the province of Shanxi states that its salt works at Xiechi Lake fostered mercantile activity that would ultimately need banks.
In 1370 the army of the Ming began using its salt rights, known as yan yin, which were initially redeemable only at the Xiechi Lake, to pay for transporting provisions to Chinese soldiers stationed on the Great Wall.
