User:Donald Trung/Qianzhuang (錢莊)/Early draft WP:SPLIT from "Paper money of the Qing dynasty"

The main financial institutions serving as intermediaries between the Europeans and the Chinese for financial purposes were the Qianzhuang (錢莊, known in English as "money shops" or "native banks"), the Qianzhuang tended to be small proprietorships which had unlimited liability. These financial institutions were often sparsely aligned along family and linguistic ties and they were rarely patronised by the local government authorities. (McElderry 1976). Larger Qianzhuang would issue company scrip against individual deposits which were known as Zhuangpiao (莊票, "shop coupon"), this scrip was also accepted by proximate shops but to cash these out would take around 10–15 days after it was given to the shop, this was because couriers would have to liaise with the issuing shop in order to rule out fraudulent Zhuangpiao notes.

The primary business of the Qianzhuang was giving out loans in the Chinese hinterland to promote trade and the exchange of commodities with the coastal regions of China. Comparatively, the financial landscape of northern China was very much focused on the imperial Chinese government. (McElderry 1976, pp. 68–69; Cheng Linsun 2003, p. 38). During the 1860s the Qianzhuang of Shanghai started looking to the foreign banking companies as a source of capital, by the year 1888 sixty two of the largest Qianzhuang had engaged in borrowing millions of taels in silver in loans from foreign banks on a yearly basis. The Qianzhuang on-lent funds from foreign banking companies to Chinese traders and merchants who engaged in the wholesale of imported products until these merchants would sell their stock and were able to pay off their debts. This method of on-call credit from foreign banks were known as chop loans (, chaipiao). (McElderry 1976, p. 21; Pan Liangui 2004, p. 105).