This chapter describes how money and credit featured in the economic operations of Chinese merchants in Java, and more generally in maritime Southeast Asia, from precolonial times up to the early twentieth century. It first outlines the general development of Southeast Asian Chinese economic activities over this period, including the advance of Chinese capital and labour beyond shipping and trading activities into the realm of production during the seventeenth and eighteenth centuries. Attention is given to the roles played in this process by petty coinage, tax farming, and credit institutions. The chapter examines how capital was borrowed and pooled for investment, why charitable and community organizations such as the Kong Koan (Chinese Council) of Batavia and the Tjie Lam Tjay Association (“House of Aid and Direction”) in Semarang, as well as Chinese temples and clan associations, emerged as important sources of finance, and why the importance of such institutions as credit providers declined from the late nineteenth century onward.

Chinese Economic Activities in Precolonial Southeast Asia

During the first millennium, trading links were already established between South China and Southeast Asia (Wang 2003; Christie 1998). While the historical literature has generally referred to the traders as “Chinese”, closer studies indicate that the first commercial connections were probably established by Austronesian seafarers. By the fourteenth century, the trading community seems to have been one of hybrid ethnicity; only in later times did it come to be identified as unambiguously Chinese (Reid 1996; Schafer 1967; Siu and Liu 2005). Initially the main Southeast Asian products involved in the trade with China were resins, benzoin, camphor, rhinoceros horn, and sandalwood. By the fifteenth century this list had expanded to include black pepper, sappanwood, sea cucumber, bird's nests, tortoiseshell, coral, cloves, nutmeg, and mace (Chang 1991; Ptak 1999, chapters 1, 3, 7–10, 12–13). In the sixteenth and seventeenth centuries, the chief products sought by the Chinese in maritime Southeast Asia were sugar, bird's nests, sea cucumber, pepper, tin, and timber.