The field of modern Chinese history has been blessed with a number of insightful books on business and economic history in just the past two calendar years.Footnote ¹ Researched and written over the better part of the past decade, informed and perhaps inspired by more recent economic issues in China, sometimes they are framed in terms of the “history of capitalism,” sometimes they focus on the history of socialism, and sometimes they take a narrower focus on an industry or institution. Whatever their framework, all these recent volumes enhance our understanding of the role of the state, the market, and economic development in Chinese history. Luman Wang, in Chinese Hinterland Capitalism and Shanxi Pianohao, adds to this list and takes us inside the role of Shanxi piaohao, key financial institutions and intermediaries that flourished from the middle to end of the nineteenth century.

Wang poses an important question: “could the Chinese hinterland promote and support capitalist development in the age of imperialism?” (p. 8) Her answer is very much yes, and the failure of past studies to explain this idea points to a number of false binaries in how we think about the interior of China in relation to capitalism and the global economy. For too long, Wang argues, there has been a conception of interior China as a “stagnant other” compared to the seemingly vibrant areas in and around treaty ports on the coast. From one point of view, Shanxi and the interior was a hinterland, but, as Wang explains, it was also a “heartland,” as she describes how Shanxi piaohao played an “expansionist role” in “transforming market, trade and finance in the age of imperialism and capitalism” (p. 3) by supplying a variety of credit and financial instruments.

The initial chapters examine the creation and administration of Shanxi piaohao. Chapter 1 covers familiar ground on the nature of trade relationships in the Qing dynasty, the structure and constraints of the monetary system, and the demand for interregional remittances and credit instruments to facilitate commerce. Piaohao developed because they provided an important service. Chapter 2 will likely be most interesting for specialists (and perhaps the most dull for general readers) as Wang explains the organization and administration of piaohao at the level of policy, personnel, and record keeping. She provides detailed information on levels and amount of capital, how the remittance business worked, the accounting systems in place, and the interlocking web of personal relationships among different piaohao: “Senior managers of one piaohao firm were often investors of other piaohao after accumulating capital” and marriage between different families was also common (p. 65). For Wang, piaohao are never purely abstract economic institutions, but deeply embedded in time, place, and custom.

Chapter 3 examines the relationship of piaohao with the market and the different levels of the Qing state. In the middle of the nineteenth century, piaohao played an important role in remitting tax payments from the provincial government to the central government. However, Wang urges readers to see tax remittance as only one part of their overall business and not to conclude that these institutions flourished because they were “clients” of the government (p. 88). This chapter in particular brings out the uneven and contested nature of fiscal relationships between the provincial and central government in the middle and late nineteenth century: the central government tried to prohibit private remittance of provincial tax by piaohao several times but did not succeed.

Chapters 4 and 5 offer a new explanation for the apparent “fall” of piaohao. At the turn of the twentieth century, Shanxi piaohao generally did not turn into limited liability joint-stock banks. After the Sino-Japanese War, the Qing began to move toward fiscal centralization and consolidation. At the time, many observers, including reformers such as Liang Qichao, saw the lack of transformation of piaohao as a failure. However, Wang argues just the opposite. Having been in the remittance business for half a century, many families and lineage groups with interests in piaohao decided they would rather invest their money elsewhere, often in industry. There was no failure; there were clear-eyed decisions. Here, Wang makes a cogent connection between the linguistic terms we use and the narratives they create. Translating Shanxi piaohao as Shanxi banks created a predetermined image of a “singular future” whereby these small-scale enterprises become massive financial institutions (p. 170). But we should not be tempted by such a teleological view.

Because of the complexity of the subject and the price tag of the volume (particularly for the hardcover), this book is likely beyond the reach of undergraduates and would make the most sense used in a graduate-level class on Chinese economic and business history. Such classes have many recent works to tackle. Let us hope this field continues to flourish.