Going Postal at the Qiaopiju

The Chinese Qiaopiju, or “overseas letter offices,” lasted for a century, ending only when the foreign governments implemented anti-communist banking controls.

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How could riots ever break out over a dispute about post offices? Maybe huge sums of money were at stake for migrant workers, as they were in nineteenth-century colonial southeast Asia.

For decades, writes historian Lane J. Harris, the Qiaopiju, or “overseas letter office” system, connected southeast Asia with mainland China. Overseas Chinese depended on the system, the participating firms of which could be run by innkeepers, small traders, or even the labor brokers who sold workers into debt bondage.

Chinese sojourners had been working abroad in southeast Asia in sizable numbers since the 1760s. Whether they lived in urban centers or remote plantations and mines, they would send wages home by entrusting their money to private couriers who traveled back and forth by junks. But this old-school method depended on trust. Worse, workers had to cough up exorbitant fees, and agents had limited options for expanding their businesses, Harris explains.

By the 1870s, the owners of the new Qiaopiju didn’t have to transport cash in person. Instead, they adopted sophisticated financial practices similar to today’s international bank transfers.

At the Qiaopiju, a worker handed over cash and a pixin, or a message to the intended recipient. The firm would bundle multiple pixin into one package, to be sent to China by commercial steamship. Days later, right before the ship steamed into port, the Qiaopiju owner in southeast Asia would telegraphically transfer the remitted funds to an office in the ports of Hong Kong or Xiamen. The Qiaopiju agents in China could then withdraw remitted money in local currency, match the right amount to the individual pixin, and send everything off to its rightful beneficiary.

“The genius of the Qiaopiju procedure was in exploiting the implications of steamship transportation and the telegraphic transfer, the latter having been introduced in Asia in the 1870s,” Harris writes.

While funds could be wired directly in a matter of minutes, the Qiaopiju owners were able to make money from the seven-to-ten days that it would take the pixin to arrive by boat.

“Those ten days gave the Qiaopiju the opportunity to pool the remittances and use them as no-cost short-term loans to engage in other economic activities like currency exchange speculation or price arbitrage—buying cheap and selling high—between commodity markets across the region,” writes Harris. In this way, “Qiaopiju firms made the bulk of their profits by exploiting the chaotic currency systems prevalent throughout Southeast Asia, Hong Kong, and coastal China.”

However, the same social changes that made Qiaopiju so profitable also threatened to put a crimp in their business, as European governments in southeast Asia became concerned that the remitted funds leaving their colonies were “‘unproductively’ draining their economies.” These governments sought to outlaw Qiaopiju by denying private companies the authority to carry mail, declaring that only states had the right to operate postal services.

“In Asia, the British first introduced the idea of a state postal monopoly with the passage of the India Post Office Act of 1866,” Harris notes, “which not only granted an exclusive postal monopoly to the state, but specifically targeted indigenous remittance and letter networks by outlawing the private carriage of ‘clubbed packets.’”

But Qiaopiju did not take the challenge lying down. In Singapore, a British bid to route remittances through a so-called “Chinese Sub-Post Office” ended up sparking the deadly Chinese Post Office Riots of 1876.

Eventually, colonial governments carved out compromises to license Qiaopiju. For example, the states of Selangor, Perak, and Pahang in Malaya “allowed them control over the remittance trade in exchange for sending their clubbed packages through the state post,” says Harris.

Qiaopiju firms thrived especially at the turn of the century. In the early 1900s, there were around 280 Qiaopiju in the British Malayan trading centers of Singapore and Penang alone.

Despite war and revolution, the Qiaopiju network survived well into the twentieth century. For example, when remittance hubs like Fuzhou, Singapore, and Hong Kong were occupied by the Japanese military in World War II, companies “shift[ed] to black-market operations and develop[ed] overland ‘smuggling’ routes into Nationalist-held areas through Indochina,” according to Harris.

Even China’s post-war Communist government proved “just as willing as the Nationalists to recognize the value of [Qiaopiju] remittances as desperately needed foreign exchange.”

International sanctions against Communist China ultimately chipped away at the Qiaopiju firms’ business, and the Cultural Revolution was the final nail in the coffin for the system.

Still, the logic behind Qiaopiju is still around, and “similar ‘informal’ companies probably helped funnel an estimated sixty billion dollars into China from overseas Chinese in 2012,” Harris writes.

The success of Qiaopiju has traditionally been attributed to Confucian and other shared ethnic values. But Harris rebuts this view, which he argues “erase[s] the instrumental economic practices overseas Chinese firms used to transnationalize their businesses.”

In fact, shrewd Qiaopiju owners tapped technological advances, such as steamships and the international telegraph system, to move beyond just taking a cut of migrants’ remittances.

“The organization of Qiaopiju firms, their business practices, their profit-making strategies, and the structure of their network were not ‘traditional,’” writes Harris, “but created to exploit the incomplete, negotiable and porous boundaries of the global nation-state and colonial systems.”

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