The term Jinshang is a tribute given to merchants from Shanxi Province for their achievements in building Chinas commercial culture.

Jin is the shortened form for Shanxi Province. Although they lived in closed residences, their sense of business possibility was not restricted.

Early in the Spring and Autumn Period (770-476BC), China was still an agricultural society with an undeveloped commodity economy. Salt, at that time, was a necessity in people’s daily life; moreover, it was the most important commodity. The abundant salt produced in Shanxi gave rise to the earliest Shanxi merchants.

However, it was during the Ming (1368-1644) and the Qing (1644-1911) dynasties that the Jinshang reached their period of peak prosperity.

Their footsteps not only covered China but also reached Japan, Southeast Asia, Arabia, and Europe. Shanxi merchants were also the earliest Chinese dealers trading with Russian merchants, and in the greatest number.

Their business interests ranged from salt, iron, cotton, silk, and tea to various financial endeavors (including pawnshops, private banks, and account bureaus).

The Strongest Merchants Group in Qing Dynasty

Shanxi merchants became one of the, if not the most, successful and powerful merchants groups in China. They were viewed as equals to Italian merchants in world economic history. In the Qing Dynasty, Shanxi merchants were listed at the top of merchants groups in China, with a good reputation in Asia and even Europe. They excelled especially in three industries, namely: camel teams, ship teams, and draft banks(票庄).

Camel Team

Camel teams, one of the important Shanxi merchants groups, specialized in transportation by camel, with tea as their main merchandise. The merchants specialty was that they were in charge of every aspect from buying, processing, and transporting fresh tea, to selling the tea in different destinations.

Shanxi merchants purchased several tea mountains along Fujian, Hunan, Hubei, Zheijiang, and Jiangsu Provinces, acquired fresh tea, and processed it into brick tea(砖茶), and then by road or river delivered the products to their franchise stores. Their tea mainly went to Mongolia and Russia. The transport of tea was quite a dangerous job at that time.

Fleets

Fleets emerged in the middle of the Qing Dynasty. With the development of business and commerce, there was an increasing demand for copper, which was used for minting. Shanxi merchants then began to organize ship teams to import copper from Japan. The Jies (颉氏) and Fans (范氏) were all famous "merchants of foreign copper."

Shanxi Draft Bank

Even though camel and ship teams enjoyed a good reputation, the greatest applause went to another industry: Shanxi draft banks (Piaohao 票号or Piaozhuang 票庄).

It was the Shanxi merchants who first established the Piaohao trade exchange shop in China. The first draft bank in Chinese history was the "Rishengchang (日升昌) Draft Bank" established by the Li’s in Pingyao (平遥), which is now the home of the China Draft Bank Museum.

Legend has it that it all started around the 1810s when a paint and dye merchant started Chinas 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.

The branches of Shanxi-based banks covered not only China but also stretched into Russia in such cities as Moscow and Petersburg. "Heshengyuan" (合盛元),  the first draft bank in Qixian , initiated Chinas international financial institutions.

It established franchised banks in Tokyo, Osaka, Yokohama, Kobe in Japan, and also in Korea. Thus, for an entire century until the fall of the Qing in 1911, the Shanxi bankers had dominated the money transfer business in China.