Traditional finance and China's agricultural trade, 1920-1933

This article analyzes the operation of modern China's nationwide traditional financial network. The network was hierarchical, with Shanghai as the center. Coexisting with the center, however, were several distinct regionally oriented subsystems in the Lower Yangzi Valley, North China, Central China, and South China. Each subsystem had its own financial center, which was the center for many regional, or lower level, markets. Each of these regional financial centers was surrounded by many even smaller subcenters, which extended level by level down to the bottom of the entire financial system: the local township markets. In this way, all Chinese rural households were incorporated into the financial network through local markets. Therefore, the flow of currency between the financial centers and subcenters was the true link between the central markets and local markets, and the trade in agricultural products created the real tie that connected rural households with various markets.