Pingyao is a dusty town where 40,000 people live behind 33-foot-high Ming dynasty walls. Once, it was China’s banking capital. Then the banks failed, and unemployment soared, plunging the city into a depression.
Worried you might have missed the latest business news? Think again. Pingyao’s economy collapsed a century ago, after the fall of the Qing dynasty and an invasion of foreign banks eager to compete. But the city—whose 14th century architecture remains in part due to a lack of funds for urban development—is coming to life again as a place where today’s struggling businessmen can learn the lessons of the past:
The first bank in China, called Rishengchang, or Sunrise Over Prosperity, is now a museum in the town center, as are four other banks.
So great is the mystique around the banks that Chinese leaders have made pilgrimages here from Beijing. Framed photographs in Rishengchang show visits by Hu Jintao, the current Chinese president; Jiang Zemin, his predecessor; and Zhu Rongji, the former prime minister. Their visits were more relaxed than that of Emperor Guangxu, who slept in one of Pingyao’s banks while fleeing invading European and Japanese troops in 1900.
To the people of Pingyao, today’s leaders can learn from the old ways of doing business.
“Until the end of the Qing dynasty, Pingyao’s banks had confidence, trust and good manners,” said Li Yuerong, an aide to the manager of the museum in Rishengchang, which receives about 2,000 visitors a day. “This has a lot of benefits for management and financial development.”
It certainly has benefits for Pingyao, which can use the tourism revenue. But those who revere the town’s historic banks may be looking through rose-colored glasses. Fear and deceit were equal parts of Pingyao’s banking history. By neglecting to study the city’s failures—as well as its successes—today’s leaders are more likely to repeat them.