Shed people (pengmin 棚民, penghu 棚戶, also called shanpeng 山棚 or liaomin 寮民) were migrant workers living in unorganized settlements in the vicinity of factories or workshops offering them some income. Most shed people had left their original villages where their households were registered (huji 戶籍). As unregistered persons they escaped tax registers. Yet this was not the only reason for the local governments to mistrust shed people communities: in case they lost their labour or other means of income, they might crowd together and stage a rebellion against the authorities.
The phenomenon of shed people was rampant during the Ming 明 (1368-1644) and Qing 清 (1644-1911) periods and was mainly seen in the southern provinces, where new industrial branches like mining offered opportunities for poor peasants to earn a better income.
The earliest recorded instance of a shed settlement was seen in the mid-16th century in the province of Fujian, where in the district of Yongfu 永福 (today's Yongtai 永泰) large numbers of peasant migrated to, most of them hailing from Zhangzhou 漳州. The reason for this migration was long-term crop failure, in this case, of leek (jing 菁) or turnips (manjing 蔓菁), in other cases the loss of own land due to indebtedness. Peasants therefore left their homelands and sought to survive in hill regions which were not controlled by gentry landowners nor by tax collectors. During the Longqing reign-period 隆慶 (1567-1572), such settlements were also found in Jiangxi, Hubei and Guangdong. In the mountain settlement of Wanyang 萬羊山, Guangdong, they cultivated indigo (lan 藍), which they successfully sold to merchants. Shed people from Pingxiang 萍鄉, Jiangxi, cultivated hemp (ma 麻). The settlements reached considerable size. That on Mt. Yunwu 雲霧山 in Huizhou 徽州, Anhui, for instance, counted 200 families.
The local authorities had a particular problem when these illegal settlers hailed fro other provinces. It was difficult to force them back to the original jurisdiction. In the mid-17th century, in the province of Zhejiang, 27 shed communities were known. Many inhabitants there came from Xuzhou 徐州 and Huai'an 淮安 in Jiangsu, Anqing 安慶 in Anhui, and Wenzhou 溫州 and Taizhou 臺州 in Zhejiang. The settlements in southern Anhui were inhabited by people from Suzhou 蘇州, Songjiang 松江, Changzhou 常州 and Jiangning 江寧 (i.e. Nanjing) in Jiangsu. Settlements were also found along the coast in nearly all prefectures of Fujian. In the early 18th century, there were shed settlements in nearly all prefecture of the province of Jiangxi. In the early 19th century, the number of shed people living in the border region between the provinces of Shaanxi, Hubei and Sichuan (area of Mt. Nanshan 南山 and Mt. Bashan 巴山) amounted to more than a million persons. In 1836, all prefectures of Yunnan had the problem of illegal shed settlements, most of them located in the districts of Kaihua 開化, Guangnan 廣南 and Pu'er 普洱. The districts of Zhaoping 昭平 and Rongxian 容縣 in Guangxi included shed villages founded by people from Fujian. In the course of the 19th century, Henan and the three northeastern provinces also experienced the founding of wild settlements.
Many shed people sold their labour to landowners, miners or workshops, while others worked as tenant farmers to make their living. The latter made regular labour contracts with a landlord on a one- or three-year base, and were thus protected by law. The communities produced food (maize, sweet potatoes, potatoes) or cash crops (leek, hemp, sugarcane, mushrooms, peanuts, ginger, pines or tobacco). Others were hired to work in factories producing, for instance, paper, or worked in the timber business. The papermakers from Guangxi – originating in Fujian – were known in whole China for their paper made of bamboo. The same business was carried out by Fukienese in several districts of Zhejiang province. In the district of Lushi 盧氏, Henan, miners began with a small community of just a few dozen of workers, but in the late Qing period, the region included more than 1,000 shed settlements with more than 10,000 workers. In the case of timber, the owner of the forest (shanzhu 山主), be he Han Chinese or the chieftain of a native tribe, usually cooperated with the users from the shed villages, and both shared the revenue.
Another group of inhabitants of shed villages were entrepreneurs who invested in certain business activities like mining, metallurgy or salt production and hired labour force. They rented out land and hired workers, some of them for just one seaons, and others on a long-time basis. The average pay for workers was between 4 and 6 liang/tael per year.
It can thus be seen that shed villages were not just communities in the wilderness, but important centres of production. As important parts of the informal sector of the economy shed villages played a crucial role for the economic development of remote regions. The produce and products of the – actually illegal - business in the hinterland were sold to the cities in the vicinity.
In the early Qing period, a large rebellion occurred in the region of Mt. Luoxiao 羅霄山, Jiangxi. The 1648 rebellion was led by Zhu Yiwu 朱益吾. A decade later, shed people in Yuanzhou 袁州 (today's Yichun 宜春, Jiangxi), revolted, and in 1674, Chen Along 陳阿龍 and Li Liang 李良 organized riots in the region. The last one in the region took place in 1723 under Wen Shanggui 溫上貴. The main reason for the revolts were attempts of the Qing government to register the inhabitants of shed villages in "shed registers" (pengji 棚籍).