Three or four decades ago it was a consensus among scholars in Chinese history that China before the advent of the Western impact was a stagnant economy under the yoke of a pre-modern regime and that the opening of China to foreign trade exacerbated the predicament of peasants by forcing commercialization on them, while the inflow of Western manufactures destroyed the handicraft industries of China. This perception has since been largely contradicted. According to Hans van de Ven, ‘The greatest achievement of China scholarship in the past decade has been the discovery of the eighteenth century. New vistas have been laid out that make clear how dynamic the period was.’ In response to this dynamism, there emerged two kinds of financial institutions serving the needs of the economy. One was the so-called Shanhsi banks (Wade-Giles mode of spelling is used throughout this paper in order to preserve consistency with Chinese words in quotations), that is, p'iao hao, which deployed nation-wide networks of branches and was engaged in long-distance remittances, and, after the T'aip'ing Revolution, remittances of provincial tributes to Peking came to be handled by them. At the end of the nineteenth century there were 32 of them, having 175 branches in all the major cities of China. Their main function, however, was remittance business and their spare cash was lent to the provincial authorities, to individual officials and to the ch'ien chuang. That is, they did not lend money directly to commerce and industries.