China's sudden ascendance as a global economic power has been greeted with a curious mixture of both admiration and doubt. The country's bright economic future has prompted investors to gobble up shares of Chinese firms with little understanding of how this predominance gradually comes into being.
Among all that has facilitated the present Chinese growth miracle, centuries of regional merchant groups are arguably a significant part. Each merchant group has been crowned with eternal glory in the long history of Chinese civilization. In observing the development of Chinese merchant groups, it becomes apparent that no business group can exist without timely opportunities, the right conditions and a beneficial geographical situation.
The splendor enjoyed by the Shanxi and Anhui merchants of old has become legendary. However，special circumstances, which blessed the beginning of China's reform and expansion, led to the unprecedented economic achievements of Guangdong's merchants, just as the forward-looking, multi-tiered market economy cultivated the success of Zhejiang's businesspeople.
Shanxi merchant group
The Shanxi merchant group, from a region with a fair share of barren land, achieved striking commercial fame by recognizing the virtues of business, faithfulness, entrepreneurship and cooperation with fellows. They showed no fear toward any kind of difficulties, which were described by Western scholars as "the Spirit of Shanxi," or more precisely, "the Spirit of Shanxi 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 of the 19th century. Legend has it that it all began during 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.
By the mid-19th century, dozens of piaohao firms based in three Shanxi counties were setting up branch offices throughout major commercial cities in China, and turning -- of all the places in China -- Pingyao, a remote, little-known city, into the financial hub of a nationwide network of money remittance. After the turn of the century, they reached into Japan and Korea. Thus, for an entire century until the fall of the Qing in 1911, the Shanxi bankers had locked up the money transfer business in China.
