Jiangyou merchants faced a dire "triple threat": the curse of geography—their golden waterways in peaceful times became prime spots for tax extortion during turmoil, leaving them no escape; the fragility of their business model—while Shanxi merchants relied on highly liquid, discreet bills of exchange tied to official patronage to bypass physical tax stations, Jiangyou merchants dealt in bulky, high-value goods like Jingdezhen porcelain, tea, timber, and grass cloth, making them easy targets for likin tax collectors; and the severance of their traditional pathways—unlike Huizhou merchants who could retreat to the salt trade under state protection, Jiangyou merchants operated in fully marketized sectors with no monopolistic safeguards, leaving them defenseless against military and fiscal predation. Yet a narrow path to survival emerged—Shanghai—beckoning the desperate with a glimmer of hope: head to Shanghai and fly the "tax-exempt flag." When all domestic routes were blocked, turning to foreign firms became the only light. The "tax-exempt flag" was a lifeline; the transit tax (zǐkǒu shuì) offered a legal loophole for Chinese merchants on the brink—by operating under a foreign flag and paying a 2.5% transit tax, they could evade likin rates of 35% or higher. Shanghai served as the sole ark of refuge—its concession areas, shielded by extraterritoriality, lay beyond the reach of Qing tax authorities, attracting all seeking tax avoidance, safety, and new commercial opportunities. Which merchant group was the first to compradorize? Conventional narratives point to coastal ports like Guangzhou, Shanghai, or Ningbo, yet systematic, large-scale compradorization actually emerged among inland merchants crushed by domestic institutional oppression. This reveals that China’s modern economic transformation was driven not only by external maritime forces but also by internal institutional expulsion—the Qing dynasty, through its fiscal tool (likin), pushed its own economic pillars (inland merchants) toward foreign powers. The radical shift of Jiangyou merchants was a tragic "institutional flight." It shows that compradorization had another face: not just proactive profit-seeking but forced adaptation to escape harm. It was not merely a "sugar-coated bullet" for coastal elites but a "lifeline" for inland traders. The reshaping of economic geography was brutal—the shift from the Gan River to the Huangpu River represented not just a change in trade routes but a transfer of economic dominance from inland gentry-merchant networks to coastal colonial-commercial power. Jiangxi’s decline and Shanghai’s rise were two sides of the same coin. The story of Jiangyou merchants is an epic of survival amid "state failure"—they became pioneers of modernization not by choice but by expulsion under the old regime. Their compradorization and rerouting had dual effects: for the merchants, it reduced them from independent traders to compradors or agents of foreign firms, accelerating their dependency; for economic geography, commodity flows bypassed the traditional Gan River corridor, converging directly at treaty ports where foreign firms and "tax-exempt flags" were accessible. This led to the atrophy of the Gan River trade route. Shanghai became a "tax haven"—its concessions, backed by colonial privileges and hosting foreign firms, grew into the largest tax-exempt enclave. Not only foreign goods but also Chinese products flooded into Shanghai, assumed foreign labels, and were re-exported inland, transforming Shanghai from an ordinary port into a global trade and financial hub. Its prosperity was built, to a significant extent, on the massive economic drainage inflicted by the likin system on inland China.
Comments