Rishengchang: An Early Chinese Bank in Pingyao

Rishengchang worked out of Pingyao, and its counter did the work of a bank while looking like nothing more than a shop on a busy commercial street. It is generally accepted as the first piaohao, the remittance houses that Shanxi merchants built to move money across the empire, and piaohao are described as the predecessors of the modern Chinese banks. Its founding is usually placed in the Daoguang years of the Qing dynasty, 1823 being the estimate generally given, but the exact year remains disputed: some scholars argue for 1797, others for 1824. The premises are now a museum, and in 2006 they were entered on the list of Major Historical and Cultural Sites Protected at the National Level.

A merchant on the road with silver in his chest risked losing it to bandits, and the weight of it ate into every profit. The remittance house answered both problems by leaving the silver where it was. The customer paid his sum over a counter in one city and received a written instrument in exchange, cashable at the firm's branch in the city where the money was needed; the house moved the silver instead of the traveller. The instruments were written in code, with Chinese characters standing for figures and the code changed regularly, to keep the information on a note confidential. By the close of the nineteenth century thirty-two piaohao were running 475 branches that served most of China, and central Shanxi had become the de facto financial centre of the Qing state.

Rishengchang was run by managers, not by the family that owned it. The investor put up the capital and appointed a chief manager, the dazhanggui, and the running of the house belonged to the manager: the branches, the staff, and the letters that told one counter what another had done. The first of them, Lei Lutai, died at his desk in 1849, and he left the house to an employee rather than to his own son. A rule of the trade kept an investor's sons, sons-in-law and brothers-in-law out of the management posts, and managers were trained from the bottom up. What remains of the house today is the counter and the rooms behind it, kept as a museum with the name still over the door.