The rise and fall of the rishengchang bank model: Limiting shareholder influence to attract capital

Abstract

In the early 1800s, an era of profound isolation, the remote northern inland province of Shanxi hosted China’s premier financial center. Shanxi banks offered empire-wide branch networks and a full array of services markedly resembling those of Western banks. While most accounts suggest a purely Chinese origin, and thus a remarkable case of parallel economic evolution, a strong case can be made thatWestern banking diffused into Shanxi via Russia.