Piaohao

Piaohao (Traditional Chinese: 票號, literally 'draft banks'), also known as piaozhuang (票莊), huihao (匯號), or huiduizhuang (匯兌莊), in Mandarin Chinese, or Shanxi banks (山西票號) or Shansi banks in English, were a type of bank that existed in China during the Qing dynasty until approximately 1952.

The piaohao were started by merchants from the province of Shanxi who were often originally engaged in other businesses before they entered finance. The piaohao were mostly active in northern China while the qianzhuang were mostly active in the south. The piaohao continued to be the dominant financial institutions of China until 1900 when more modern commercial banks started being created by both the imperial and provincial governments, and the qianzhuang benefitted more from their close ties with foreign banks operating in Chinese treaty ports. During their heyday the piaohao had over 400 branches operating across the territory of the Qing dynasty and branches in other countries like Japan, Korea, Russia, India, and Singapore.

After 1912 practically all piaohao either closed or were transformed into more modern types of banks. They continued to exist during both the early Republic of China and the People's Republic of China until they were all finally nationalized alongside the qianzhuang and the rest of the Chinese financial industry in 1952.

Structure and business strategies

All piaohao were organized as single proprietaries or partnerships, where the owners carried unlimited liability. They concentrated on interprovincial remittances, and later on conducting government services. 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.