The Development of Chinese Accounting and Bookkeeping Before 1850: Insights from the TTng TTi Shhng Business Account Books (1798-1850)

Abstract

Since China’s ‘reform and opening up’ policy began in 1978 there has been increasing interest in how Chinese business activity was organised during the era before the imposition of central planning under Chairman Mao. Some business archives from that era have now been discovered and examined by Chinese scholars but the businesses and their accounts have mostly been of a relatively simple nature or have clearly reflected the increasing influence of Western businesses (and Western double-entry bookkeeping [DEB]) that was disseminated through the ‘treaty ports’ (such as Shanghai) established from around the middle of the 19th century following the Opium Wars. In this paper we report our exploration into the original account books contained in the archive of Tŏng Tai Shēng (‘TTS’), which has recently been 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. 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 măzi [苏州码字]. Given the claims that have repeatedly been made for the importance of DEB for capitalism’s development in the West, our findings from examining this extensive collection of original account books are important for understanding the nature of Chinese bookkeeping and accounting and its role in China’s economic development.