The Development of Chinese Accounting and Bookkeeping Before 1850: Insights from the Tŏng Tài Shēng Business Account Books (1798-1850)

Abstract

During the last two decades, there has been a surge of academic interest in how Chinese business activity was organised in the pre-modern era before China’s forced opening to the West in the mid-19th century, following the Opium Wars. In this paper we report our exploration into the original account books contained in the archive of Tŏng Tài Shēng (‘TTS’), which has recently been re-discovered and is the largest such archive examined so far. It yields important data about economic activity but our focus here is on the accounting practices it reveals. TTS was a substantial ‘grocery/merchant-banking’ business in northern China and its surviving books span a period from the late 18th century to the middle of the 19th century. They may therefore be regarded as representing primarily ‘indigenous’ Chinese bookkeeping practices before China’s forced opening in the mid-19th century. We set out the various kinds of accounts that were kept and what can be reconstructed of the interrelationships between daily running records and the various ‘ledger’ accounts for customers and suppliers (including loans at interest) and of the process by which financial statements were produced. We give illustrations of important accounts and also explain the specialist system of numerals used for accounting purposes, the Sūzhōu măzì [苏州码字]. Given the claims that have repeatedly been made for the importance of double-entry bookkeeping (DEB) for capitalism’s development in the West, our findings from a detailed examination of this extensive collection of original account books, when compared with Western accounting history, shed critical light on the nature of Chinese bookkeeping and business organization and on the larger questions about Chinese commercial culture and the path of development.

Keywords: Chinese accounting archives of late Qīng era, Chinese business history, Sūzhōu măzì, double-entry bookkeeping (DEB)

JEL Classification: B15, D20, M41, N85, R32, Z10