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Ancient China's Merchant Groups and Merchant Culture

Throughout China's 5,000-year history, business has always been an indispensable vehicle for its social development. When the history wheel entered the Ming (1368-1644) and Qing (1644-1911) dynasties, Chinese guilds£¬or business associations based on lineages, came into shape.

In the history of Chinese business£¬guilds are best represented by the merchants of Shanxi£¬Anhui£¬Zhejiang, and Guangdong provinces who enjoyed great prosperity throughout several ancient dynasties£¬when all the elements necessary to sustain a successful economic climate combined in their favor£®

Shanxi merchants of the Ming and Qing dynasties, for example, evolved as both the farming culture of the Central Plains and the nomadic culture of the north became more sophisticated£®Inevitably£¬trade between the agricultural and nomadic communities developed quickly, creating an opportunity for the growth of Shanxi merchants£®

Situated in the midst of the cradles of these cultures, Shanxi naturally became the indispensable trade link between the two.

Conversely£¬in feudal imperial time the Chinese commodities economy did not develop along normal entrepreneurial lines£®As a result£®because the destiny of ancient Chinese guilds was managed according to the imperial stratum£¬they were unable to avoid decline when the era of monarchy ended£®

As the reign of the Shanxi and Anhui merchants came to an end£¬the businesspeople in Zhejiang and Guangdong who had been active in the southern coastal areas also saw their fortunes fade£®

However, by contrast£¬they did not completely leave the historical stage -- they revived under a strong international focus in Shanghai and Guangzhou£¬the trade ports opened by Western aggressors at the end of the Qing Dynasty, making them the ancestors of China's modern merchants£®
Shanxi bankers

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.
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