Risk management in prewar China: A study of rotating savings and credit associations (ROSCAs) in Qing dynasty and Republican-era Shanxi province

Matthew Lowenstein

Business History, 2025, vol. 67, issue 1, 50-76

Abstract: This article studies Rotating Savings and Credit Associations (ROSCAs) in Qing-dynasty (1644-1911) and Republican-era (1911-1949) Shanxi province. These were communally based financial institutions crucial to the traditional Chinese economy. Drawing on previously unused primary sources this article examines historical Chinese ROSCAs from the perspective of risk management. It finds that Chinese ROSCA credit was collateralised by fixed assets. In the event of member default, the ROSCA exercised ‘live sale’ rights over the delinquent member’s ­collateral. These findings have important implications for one of Qing and Republican China’s most critical financial institutions and for Chinese economic history more broadly. They suggest greater liquidity of fixed assets and ability to mobilise capital than has previously been appreciated.

Date: 2025
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DOI: 10.1080/00076791.2023.2222662

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