In simple terms, commerce refers to the selling of goods for profit. Although some types of exchange must have occurred in pre-historic China, it is only in the Xia, Shang, and Zhou dynasties (ca. 2100–256 BCE) that there exists clear evidence of commercial activity for profit, but it seems to have been still at an embryonic stage, mainly limited to barter. In the latter part of the Zhou dynasty, during the Spring and Autumn period (770–476 BCE) and the Warring State period (476–221 BCE), there occurred significant change—commercial activity expanded and metal currency (to be used for purchases) appeared. A distinct class of individuals engaged in commerce as business owners, merchants, vendors and the like (for simplicity’s sake often referred to as merchants below, but understood to encompass this larger group) began to become evident. During the subsequent Han (206 BCE–220 CE) and Tang (618–907) dynasties, business of all types experienced robust growth. Commercial metropolises proliferated within China and some of these cities even achieved renown abroad. Commerce continued to develop, expand, and mature in dynastic China from the Song (907–1279) and Yuan (1271–1368) through the Ming (1368–1644) and into the Qing (1644–1911) until the First Opium War (1839–42).

The scope of ancient Chinese commerce was multifarious. It encompassed governmental policies and sanctioned conduct of business as well as every sort of commercial endeavor conducted among people as private individuals, not to mention organizations connected to one or another aspect of commerce including the production of goods and the nurturing of markets and trade.

Throughout the history of dynastic China an official policy of “favoring agriculture over commerce” was pursued; this reflected the traditional view that farming and farmers were essential. They were foundational and productive in society in ways that business and merchants were not. Over the centuries, to implement this, the government instituted strict controls on commerce. Even if, as seems likely, much business escaped such management, with officially overseen entities only the tip of the iceberg of commercial enterprise, however, this is still a distinctive feature of the development of commerce in China.

In ancient China those engaged in commerce also paid attention to the management and operation of their businesses. Most merchants used shop signs or signboards to attract customers; advertisements were colorful and engaging. Outside of stores, in the streets, vendors hawked their wares with distinctive cries. Some businesses even hired celebrities to market their products.

Eventually specialized books written about or by individuals in business appeared, sometimes including relevant descriptions of routes or travel. Among these were: Tianxia shuilu lucheng (Water and land routes of the empire) by Huang Bian (fl. sixteen century) of special use to traveling merchants and Shi shang lei yao (Encyclopedia for gentry and merchants) by Cheng Chunyu (fl. seventeenth century) with detailed information appropriate for scholars-merchants. Shengyi shishi chujie (Introduction to business) by Wang Bingyuan (fl. eighteenth century) was educational, functioning rather like a training manual for apprentices, etc. 

It is inevitable to have cash flow problems during the course of conducting business. Commercial lending emerged to satisfy that demand. In China, the earliest specialized lending institution was the pawn shop, in nascent form affiliated with Buddhist institutions in the fifth century and subsequently fully developed as a state-run entity. Later what are referred to as qianzhuang or “money shops” appeared. These were a type of local private bank, particularly aimed at facilitating the cash needs of business travelers.

Old, reputable shops are models of successful businesses which are trusted by their customers. The Ruifuxiang Silk Store and the Tongrentang pharmaceutical company are both time-honored brands in Beijing dating back to the Qing and existent until today; established in the late Qing, the store known as Duo Yun Xuan is still famous in Shanghai for its supplies, especially the “four treasures of the scholar’s study”—brush, ink, paper, and ink stone.

In their daily life, those engaged in commerce were not so different from others without high official rank or status. However, if economically successful, they would have had a more luxurious lifestyle, with, for example, a more refined diet. At the same time, they suffered from the traditionally low social status accorded to those in business (as compared to scholars, farmers, and artisans, not to mention those of imperial or noble birth) and had limited or no opportunity to marry members of the more highly-regarded classes.

Ancient Chinese merchants had to navigate their way to success through a sea of regulations and rules. They had no choice but to deal with government officials in order to ensure smooth business activities and transactions, sometimes occasioning a range of complications. In order to combat their popular image as vulgarians, they sought to establish good relations with local literati and also were often enthusiastic supporters of public charity projects. In fact, it seems those engaged in commerce in ancient China, for the most part were not as they were often characterized, people only interested in making money.

Business was initially run by individuals in ancient China. During the Ming and Qing dynasties this changed, and regional groups came to prominence. This was due to various reasons such as the rapid development of the commercial economy, merchants’ improving social status, intensified competition and a changing concept of business which made success more likely for those in or associated with organizations. Regional merchant groups with unique local characteristics had gradually formed throughout China, and by the Ming and Qing periods had become too numerous to be listed here. The more famous ones were the Shanxi merchants, Dongting merchants, Huizhou merchants, Guangdong merchants, Fujian merchants, Ning-Shao merchants, and Jiangxi merchants. Guild halls and public offices were gathering places where traveling merchants of the same trade or from the same town could meet and contact their family members or associates. These were also organizations that traveling merchants could count on when abroad.