The "Official Debt" of Late Qing County Officials and the "Listing" in the Cryptocurrency Circle: The Cross-Time and Space Truth of Financialization of Power

Author: danny

The numbers that have emerged from corruption cases in mainland China in recent years are truly exaggerated to the point of being unbelievable. A county head can easily be involved in embezzlement and bribery amounting to tens of billions.

Li Jianping, the former secretary of the Party Working Committee of the Hohhot Economic and Technological Development Zone, was confirmed by the Supreme People's Court to have illegally occupied state-owned company funds exceeding 1.437 billion yuan, accepted bribes of over 577 million yuan, and misappropriated public funds amounting to 1.055 billion yuan.

Ordinary people seeing such cases would likely ask: How could a local official in a development zone have access to tens of billions?

Indeed, if we calculate based on salary, he would have to work since the Three Kingdoms period and not eat or drink to save that much money. However, from the perspective of political economics, the value of a local power position is not the same as salary. Land, projects, state-owned enterprise funds, loans, demolitions, licenses, project approvals—these funds do not belong to him, but many must pass through his desk. A yearly salary might be hundreds of thousands, but a letter of introduction, an email, or a piece of information could determine where billions or hundreds of billions go.

Thus, local power is somewhat like a toll station. The toll station itself does not need to earn a hundred billion; it just needs the value of the cars passing through daily to be that much. (Doesn't it sound a bit like the listing BD in exchanges?)

However, if this story of official corruption stops here, it would not be particularly novel. What I find interesting is a diary left by a late Qing county official two hundred years ago.

This person is Du Fengzhi.

Du Fengzhi's story tells another tale: as long as a position can generate income in the future, someone will convert that position into free cash flow even before the person sits in it.

Modern cases like Li Jianping's tell us how much capital flow a position can control; Du Fengzhi tells us that once everyone knows there is money to be made from this position, future cash flows can even be discounted before the person takes office.

Power may not have been realized yet, but the future of the official path has already been financialized.

I. Passing the Imperial Examination, Just Getting a Queue Number

Du Fengzhi, styled Ping Shu, also known as Hou Shan, was born in 1814 in the Longtang area of Shaoxing Prefecture, Zhejiang. He became a juren (a successful candidate in the provincial examination) in 1844 at the age of 30. When we read about Fan Jin passing the examination in our childhood, it is easy to develop the illusion that once the drums sound, one can start working at the county office the next day. But the reality of the Qing dynasty's officialdom was not so pleasant. Passing the examination (becoming a juren) only proves your qualification to move up; when it is actually your turn for a position may be many years later.

Du Fengzhi's path roughly followed this route: juren → gaining entry into the bureaucratic system → entering the pool of candidates through selection → waiting for an actual vacancy → purchasing a faster selection order through donations → entering the priority queue → still having to wait for a real county vacancy to open up → only then could he be appointed.

After becoming a juren, Du Fengzhi could not pass the highest examination and remained on standby. In 1855, he participated in a major selection, and by 1863, he simply canceled his original qualification, borrowed money, and made a donation to jump the queue, creating an accelerated path of "regardless of odd or even months for the county magistrate, and not accumulating ranks for selection." After spending a large sum, he finally entered the candidate sequence in 1864, but that was not the end. He still had to wait... until March 1866, when he was finally appointed as the magistrate of Guangning County after a candidate ahead of him had to observe mourning.

From passing the examination in 1844 to obtaining an actual vacancy in 1866 took a full 22 years. How many 22 years can one have in life?!

This is very similar to how cryptocurrency projects obtain VC funding today. VCs are like degrees; if you get several top funds, your status is different, exchanges are more willing to meet you, and the next round of investors is more willing to talk, and the media will pay more attention. But status is not money. Du Fengzhi could chat with people using his degree, but he could not buy rice with it; projects can get headlines with a billion-dollar valuation, but listing on exchanges still requires waiting.

Thus, financing sometimes resembles the imperial examination; it first lets you through the door, and once inside, it tells you: there is still a long queue ahead.

Want to jump the queue? Hehe~

II. The Court Gives You a Position, You Figure Out the Travel Expenses

In 1866, Du Fengzhi finally became the magistrate of Guangning. Those who watch dramas understand that this is the time to celebrate, with lanterns and decorations, finally having made it! But the reason the Qing dynasty was the Qing dynasty is that the Ministry of Personnel only provides you with an appointment letter, not transportation or travel expenses.

The Qing dynasty did not arrange transportation for these lower-level local officials, nor did it advance travel expenses for their appointments. How to get from Beijing to Guangdong, whether family members accompany them, how to invite assistants, how to support servants, and the costs of food and lodging on the way—all of this was their own responsibility.

The Qing dynasty's onboarding arrangement: Congratulations on joining the court, work location: Guangdong, moving expenses: please handle yourself.

Du Fengzhi left Beijing in September 1866, passing through Tianjin, Shanghai, and Hong Kong, and only arrived in Guangzhou in October after more than thirty days. Upon arriving in Guangzhou, he could not go directly to Guangning, as he still had to go through the provincial capital. He had to pay visits to the governor, the provincial governor, the finance commissioner, the judicial commissioner, and the prefect, and also had to deal with the clerks, gatekeepers (aka security), and document personnel in the office.

The late Qing officialdom loved to talk about networking and cooperation, and in today's web3 and cryptocurrency circles, it is no less so. When they know you are going to a certain exchange, some people claiming to be VCs or incubators will rush to ask the project party to take a certain percentage of tokens at the valuation of the angel round before the listing, and the lockup must also be at the most favorable terms.

The problem is, Du Fengzhi had no money. After spending over twenty years on exams, odd jobs, and waiting, without family support, what could he do?

Thus, a mature business had long been developed in Beijing: official debt.

III. Ordinary People Are Poor, Money Shops Ignore Them; Future County Magistrates Are Poor, Money Shops Come Knocking

Ordinary people are poor, and money shops ignore them; a soon-to-be magistrate who is poor is a highly sought-after client for money shops. Because ordinary people may still be poor six months later; a future magistrate who is poor will have a county in hand six months later.

More than a month after Du Fengzhi obtained his official position in Guangdong, "no less than forty or fifty people" came to introduce him to official debt. A person so poor that he could not afford the travel expenses to start work suddenly became a hot client in the financial market.

The reason is simple. Lenders do not care how much money Du Fengzhi has today; they care about what position he will soon hold. On the surface, they are lending money to Du Fengzhi, but in their hearts, they are calculating how much profit Guangning County can generate.

This is also why the conditions can be so harsh. By June of the fifth year of Tongzhi, Du Fengzhi negotiated an official debt: nominally borrowing 4,000 taels, but actually receiving 2,000 taels; later borrowing 680 taels, receiving 340 taels—what about the handling fee? Have you seen half-interest?

Today, if someone tells an entrepreneur: "I will lend you four million, but you will actually receive two million, although the IOU is still for four million," a normal person's first reaction should not be to sign but to check if the other party is a scam group.

But Du Fengzhi had to sign.

He had already waited for 22 years, investing time and money in studying, exams, standby, and donations; now he just needed to get to Guangdong. At this point, if you tell the lender that the interest is too high, the lender would probably just say: No problem, you can choose not to borrow and go back to continue waiting.

The cost of financing is often not determined by the interest rate but by whether you have other options.

During the late Qing period, lenders were afraid that you would not recognize the debt after arriving in Guangdong, so they would either follow you or send someone to accompany you to your appointment, waiting to collect the money once you arrived.

Thus, among the entourage of a newly appointed county magistrate, there might be someone who looks very low-key. You might think he is a clerk, but he is not; you might think he is a guard, but he is not—he is a debt collector.

I wonder if you remember that some star projects in the cryptocurrency circle have also experienced similar situations, where a partner from a certain VC joined the team to set sail, and now it seems a bit similar?

IV. Upon Arriving in Guangzhou, the First Round of Money Is Still Not Enough

When Du Fengzhi arrived in Guangzhou, he quickly found that the money borrowed from Beijing was still insufficient. He had to run around to various offices, pay gate fees, and there were miscellaneous expenses. When he went to bid farewell to the governor's office, because the gate fee was not prepared, the gatekeeper even refused to pass his documents, and he had to negotiate the price before the gate would open.

Thus, he continued to borrow in Guangzhou, borrowing over three thousand taels from silver shops and private lenders.

What is even more interesting is why the silver shop in Guangzhou dared to continue lending? Because local people understand the county in Guangdong better than Beijing lenders. Meng Yutang, the owner of the Xie Cheng Qian Silver Shop, judged that Guangning was a "good position" and believed it could generate over ten thousand taels a year, so he was willing to continue lending.

This scene is more important than the official debt itself.

Du Fengzhi had not yet entered the Guangning County office, but the owner of the silver shop in Guangzhou had already calculated the accounts for this county. How are the tax sources? How is the commerce? Is this position good to manage? How much can it generate in a year? Is it enough to repay the debt? They have a clear understanding.

What Du Fengzhi saw was: finally, it was my turn to be an official.

What the lenders saw was: this position is starting to generate income.

The same thing, two sets of valuations.

A person who has studied hard for over twenty years sees his life ideal; the financial market sees him at first glance and has already converted his life ideal into cash flow.

V. The Most Troublesome Thing for the Late Qing County Office Is When Gray Is the Base Color.

Today, our understanding is very simple: government money is government money, official salaries are official salaries, and public affairs follow the budget. But the late Qing county office could not distinguish this.

Handling cases, investigations, arrests, duties, and clerks all require money, but the official finances are certainly insufficient. The court must know this, so in various aspects, such as taxation, fees, and fines, there will be a large gray area left. The collection of taxes and grain at the state and county levels does not end with a civil servant collecting it; rather, it involves a whole batch of clerks, duties, and local personnel living around this process.

Thus, why does a county have so much money? It is not because the county magistrate's salary is particularly high, but because taxes, justice, commerce, licenses, and local governance all pass through here. The more functions a node bears, the more people around that node will find ways to generate income from it.

This is also why simply saying "late Qing officials are morally corrupt" cannot explain this matter. It is not enough to say that the system has problems to absolve individuals; responsibility must still be taken. The issue is that if legal income and legal finances cannot cover what the system requires you to do, and gray income is long accepted to fill the gaps, then public and private interests will inevitably become intertwined.

What may have started as "this matter cannot be done without doing it this way" later becomes "everyone has always done it this way," and eventually turns into "since everyone is taking it, what does it matter if I take a little more?"

Corruption often does not burst in through the door. It first sits in the corner under the guise of "facilitating business," but after a while, it refuses to leave.

If you pay close attention, you might realize: this resembles the dealings with certain exchanges, DeFi protocols' business development (especially for listing), VC partners securing deals, and partners from certain market-making institutions, among others. Everything requires money, but the leadership provides little, and the visible bills certainly do not cover it. In some cases, the boss directly says not to use public funds. So what should one do?

VI. After Du Fengzhi took office, he did not just sit in the county office waiting for money to come in

After Du Fengzhi arrived in Guangning, with such a large debt behind him, how would he repay these high-interest loans? The answer: collection.

Before the bed was even warm, Du Fengzhi had to rush to various places. Not only did he have the official debts from his appointment to settle, but there were also the existing grain collection tasks from the state and county. He could not just sit in the county office drinking tea, waiting for villagers to come and pay their debts when they felt like it. Diaries and later research show that he would personally go to the countryside to collect debts, and he spent a significant amount of time on this.

At that time, collecting grain in Guangdong was not as simple as sending a reminder letter today. The county office would go to the countryside with clerks, messengers, and enforcers. The area was vast, and the population scattered, so the government could not find every household on its own. Therefore, it had to rely on clans and local gentry. If a household owed grain and could not be found, they would look for the clan; if the clan did not respond, they would seek out the gentry. A gentry member might have already settled their debts, but as long as the entire clan or village still had outstanding debts, the government would still approach them because they were the point that the government could reach and could apply pressure on. In the crypto world, when problems arise, exchanges will look for market makers, project parties, and KOLs who take advertisements, and so on.

This logic is quite realistic. The county office does not have the capacity to reach every final payer, so it must rely on intermediaries to apply pressure. In today's crypto world, of course, the methods are entirely different. Project parties do not arrest people or seal ancestral halls, but the organizational logic is somewhat similar: the project itself cannot directly reach every user, so intermediaries such as exchanges, market makers, communities, channels, partners, and various business personnel emerge. Projects need traffic, funds, and users, making these intermediaries valuable.

VII. If grain cannot be collected, Du Fengzhi will indeed seal the ancestral hall

The most interesting part of "Du Fengzhi's Diary" is seeing how far the collection of grain can go. If a clan owes grain, Du Fengzhi would seal the ancestral hall. If there are businesses, he could seal shops. If the actual debtors within the clan cannot be found, he would pressure those who are prominent and reachable within the clan.

Why is this method effective? Because the ancestral hall is not just an ordinary building; it is the public space of the entire clan, where ancestors, identity, and face are all gathered together.

In some places during the Qing Dynasty, when collecting grain, they would even seize the ancestral tablets first. You might not fear the county magistrate, but when the entire village sees the ancestral tablets locked up by the government, it becomes very difficult to pretend nothing has happened. In today's terms, it would be like chasing debts to your ancestral grave.

Moreover, there is also a method of collateral damage. In Guangning, there was a person with the surname Xie, who had settled his own debts but owed shared property passed down from ancestors. The problem was that there were too many brothers, and it was troublesome for the government to find them one by one, so they first placed pressure on the reachable person, letting him go back to resolve it with his brothers. The logic is simple: I know there are many real debtors; I just need to find someone I can execute against first.

When Du Fengzhi was collecting grain in Luoding, he discovered that some so-called "wealthy households" were actually as poor as beggars; you could not get money out of them even if you beat them. He judged in his diary that rather than pressuring these poor people, it was better to "limit the gentry, as they are more likely to pay than the wealthy households"—in other words, finding wealthy people to repay debts is the way to go.

This is worth remembering. Because all hard indicators will ultimately seek someone who can be executed. If there is pressure from above, the county office will look for someone below; if the lower levels are too scattered, they will look for the gentry; and the gentry will then pressure the clans. The pressure does not disappear; it only transmits layer by layer downwards.

And in the crypto world? Who can exchanges find?

Later on, Du Fengzhi's methods of collecting grain became more direct. When debtors hid, the government would look for their family members and even apply pressure on relatives; sometimes they would seal houses, threaten to demolish or burn residences, and prohibit debtors from performing rituals or harvesting late rice, forcing them to settle their debts first.

Collecting grain is originally a hard task for state and county officials, and failing to deliver would affect their performance evaluations. The governance of Guangdong itself is complex. Du Fengzhi's personal debts, the losses from his first official position, family expenses, and official costs, combined with the court's demands on him, all piled together to create that situation: public accounts require money, private accounts also require money, and in the end, they only ask how much you can deliver.

Thus, Du Fengzhi became increasingly "diligent."

This diligence is not the kind of hard work found in motivational speeches, but rather the urgency of having interest chasing after him.

VIII. Therefore, project parties will start to think of ways to harvest in the future

Faced with the pressure of grain, Du Fengzhi could go to the countryside to collect, seal ancestral halls, pressure gentry, and seek clans because people in the feudal era could not run away; the ancestral hall was there, and Du had the backing of administrative (violent) power.

What about those heavily indebted project parties? It is important to know that the pressure from a balance sheet is universal. Projects need to increase trading volume, enhance liquidity, list on more platforms, create points, staking, airdrops, and ecological incentives, and continuously find new use cases. Those that do well turn financing into products, users, and revenue; those that do poorly start using subsidies to buy data; and those that do even worse end up with a product that fails, leaving only stories, prices, and financial engineering.

This also explains why some projects, after raising large amounts of money, enter a state of being unable to stop. In the previous round, they talked about infrastructure; in the next round, they started discussing ecology; if the ecology did not take off, they would talk about consumption; if consumption failed, they would jump on the artificial intelligence bandwagon; and after a few months, when market trends changed, they would need to come up with a new story. Not every pivot is a scam; entrepreneurship inherently involves adjustments, but you must understand that there is always a bill chasing behind.

A completely unfunded small project can say, if it cannot be done, then so be it. A project that has raised tens of millions, has dozens of funds behind it, supports a large team, and is preparing to list its tokens cannot simply say, "Forget it, we won't do it anymore."

What to do? Project parties can only find various deities, whether they are market makers, communities, promoters, or manipulators, to use various financial engineering methods to harvest the market's unclear liquidity to recover and repay debts.

Du Fengzhi himself later complained during a low point in his career about the debts, losses, and family pressures weighing on him. If he had a way out, he would prefer to have hundreds of acres of land rather than continue this "nine hells" livelihood. This mindset, when applied today, many entrepreneurs should understand: being online at midnight is not always out of passion; sometimes, it is just that they have come this far and truly cannot turn back.

This was well known during the Qing Dynasty, yet it did not stop the endless stream of young people from taking the imperial examination, as everyone believed that Du Fengzhi, a commoner, although he had turned white-haired in his youth, ultimately made it ashore. In life, one can only strive for success and achieve great results, no matter what.

The most powerful aspect of the imperial examination was not its true equality, but that it made the entire society believe that there was at least one upward path. Even if this path required twenty years of study, twenty years of waiting, borrowing high-interest loans, or seeking connections, there were still people willing to squeeze in. Because for many, the most terrifying thing is not that this path is expensive, but that there are no other paths available.

Postscript

Finally, let me introduce another person, Du Lian, courtesy name Yaochuan, styled Lianqu, from Shangyu, Zhejiang. He came from the Hanlin Academy and later became a cabinet scholar and concurrently served as the Vice Minister of Rites, holding a second-rank official position. During the Tongzhi period, he served as the educational commissioner in Guangdong (the educational commissioner is a special envoy, holding a high position in the province, second only to generals and governors, above the governors and inspectors).

Who is he? He is Du Fengzhi's "distant clan nephew" (a distant relative of the same clan). According to clan hierarchy, Du Lian is actually a generation later than Du Fengzhi, but Du Lian is over ten years older than Du Fengzhi. When Du Fengzhi was young, he studied under Du Lian, and they had a close relationship during their time in Beijing. Du Fengzhi referred to him as "Lian Weng" in his diary.

Let me tell a story:

Later, Guangning had a "disturbance in the examination." Du Fengzhi fell out with the local gentry, and the situation escalated to the point where it could affect his official position. He hurriedly informed Du Lian, the educational commissioner in Guangdong at the time. Du Lian not only comforted him, saying the problem was not serious, but also personally wrote a letter to the acting governor to help him smooth things over. In the end, Du Fengzhi surprisingly was not dismissed. Although he could not stay in Guangning, he was transferred to Sihui to continue serving as the county magistrate under Du Lian's "suggestions" and "arrangements."