Entrepreneurism and Globalization in the Mongolian Frontier: A Case of Baotou, 1870–1950

During the mid-Qing era, the influx of Chinese merchant capital into Mongolia successfully integrated the nomadic economy of Mongolia into the Chinese monetary system and trade networks, predominantly controlled by merchants from Shanxi province. Following the opening of Chinese interior to the West after 1860, foreign traders established firms in Tianjin and subsequently ventured into Mongolia to procure wool and pelts, highly sought after in international markets. Facilitating the transnational trade were Shanxi merchants who served as brokers and compradors for foreign firms and pioneered an extensive banking network across China and beyond.

This paper explores entrepreneurism in the thriving town of Baotou as a case study of frontier capitalism arising from processes of globalization and trans-regional integration. In contrast to previous frontier towns that originated from ecclesiastical or administrative centers of Manchu-Mongol rule, Baotou was uniquely established solely based on trade and commerce, with its population comprised predominantly of Shanxi merchants. The expansion of long-distance trade spurred the emergence of new business practices and mechanisms that enabled the accumulation and circulation of capital. These included institutions such as broker-inns and native banks (piaohao), along with financial instruments such as shares, bonds, and futures contracts. These innovations initially surfaced in frontier towns before they were widely adopted in other parts of China. The rise of Baotou exemplified a highly commercialized and capital-intensive model of economic development that linked the nomadic frontier with an increasingly integrated world economy.