Coinage left Ming-Qing China behind world

Evolution of monetary policy overturns prevailing historical theory
By By Zhang Ning / 10-15-2015 / (Chinese Social Sciences Today)

The picture shows the process of minting in ancient China.


China was one of the first countries to use coins and also invented paper currency in the Song Dynasty (960-1279). During the Yuan Dynasty (1206-1368) and early Ming Dynasty (1368-1644), inconvertible paper money was widely circulated and coins were minted at times.

The paper currency system however ended with the abolition of the Treasury Note of the Great Ming Dynasty (Da Ming Bao Chao) due to inflation. In the mid-Ming Dynasty, silver and copper cash coexisted, leaving China behind Western countries.

The retrogression was attributed to the reversal of monetary policy as well as ideological change in the traditional social and economic spheres.

Government monopoly
Starting in the Han Dynasty (206 BC-AD 220), the philosophies of utilitarian Legalism and humanitarian Confucianism competed for dominance in the economic sphere.


When it came to coinage, Legalists stressed “uniformity,” maintaining that the government should decide currency policy and the populace should obey. Confucians, on the other hand, questioned the government’s monetary monopoly, demanding that knife-shaped currency be permitted for people’s convenience.

From the reign of Emperor Han Wudi (140-87 BC) onwards, mintage was monopolized by the state in accordance with the philosophy of Legalists. In the late Han Dynasty all the way through the Southern and Northern Dynasties (420-589), however, the monetary system was in chaos, as physical currency was extensively used.

Not until the Sui and Tang dynasties (581-907) did the central government regain a monopoly on the issuance of currency. In the Song Dynasty, the currency monopoly was intensified, when copper pieces, iron coins and paper money were designated territorially. 

From the Jin (1115-1234) and Yuan dynasties to the early Ming Dynasty, inconvertible paper currency was instituted, finalizing the government’s monopoly on coinage.

The turning point in coinage came when the Treasury Note of the Ming Dynasty was inflated and ultimately abolished. During the early reign of Emperor Xuande (reigned 1426-35), the ban on cloth, silk, rice and wheat as mediums of trade was lifted to make it easier for the commoners in life.


When Emperor Zhengtong (reigned 1436-49) was in power, cash and silver controls were loosened. Thereafter, silver was increasingly used in fiscal levies. Meanwhile, the minting of paper notes was reduced and later stopped. The treasury note was gradually removed from circulation. Only in the later years of Emperor Hongzhi’s reign (1488-1505) was a small quantity of Hongzhi Currency (Tong Bao) cast.

In 1527 when Emperor Jiajing (reigned 1522-66) was on the throne, the government restored the mints under the Ministry of Works in the two capitals Nanjing and Beijing. In the early years of Emperor Wanli’s reign (1573-1619), reformist Zhang Juzheng initiated a nationwide mintage plan, but it was aborted shortly thereafter.

Throughout the Ming Dynasty, a total of coins worth 8 billion wen (a denomination of coins) were cast, but it took the Northern Song Dynasty (960-1127) only two years to achieve that.

Due to a lack of copper cash, marketized silver became the major currency. Silver pieces of different qualities and weights were in wide circulation among the common people.

Various forms of copper cash—predominantly old money of the previous dynasty and privately cast coins—were used in canal regions between the two capitals, Henan, Hubei, Hunan, Fujian, Guangdong and Guangxi provinces. In areas with insufficient copper, low-quality silver pieces were used instead, and people in remote areas resorted to barter trade.

The messy currency situation was a result of the Ming government’s people-oriented money policy and its fear of counterfeiting if governmental mintage was not good enough. 

People-oriented coinage
In the Qing Dynasty (1616-1911), the central court adopted a moderate monetary policy. It first relied on foreign copper in mintage and then put great efforts to exploit copper mines in Yunnan Province. The reign of Emperor Qianlong (1736-95) was the second mintage peak after the Northern Song Dynasty.

In routine trade, official copper coins, which were far more convenient than silver, were very popular among the commoners. The subsequent shortage caused money prices to soar. It was not until the later reign of Emperor Qianlong that prices fell back to the target of one tael, equivalent to around 40 grams at the time and valued at 1,000 wen.

From the late 17th century to the 18th century, more and more regions used both silver and copper coinage, and copper coins were often used in large denominations. To address the situation, the government stepped in and focused on adjusting copper mintage.

During the reign of Emperor Yongzheng (1723-35), a copper ban was enforced. In the early reign of Emperor Qianlong, restrictions were imposed on coppers in block trade in a bid to rein in skyrocketing money prices, but the move shortly ended because of criticism and resistance from bureaucrats.

The Qing Dynasty inherited people-based monetary policy. In 1745, when Emperor Qianlong was in office, Pan Siju, governor of Zhejiang Province, suggested prohibiting the use of low-quality silver, but the Ministry of Revenues overruled his suggestions, arguing that it would be inconvenient for the people.

As a result, the monetary system, characterized by a mixture of government mintage and market-based currency, obtained new developments. Foreign silver dollars flooded into southeast coastal areas. Circulated by coin, they were unlike silver taels. In northern China as well as Ningbo, Zhejiang Province, and Fuzhou, Fujian Province, large amounts of copper were used while paper currency issued by businesses was also in circulation.

In the late Qing Dynasty, people were again prioritized in monetary policy. By the time of the reigns of Emperor Jiaqing (1796-1820) and Daoguang (1821-50), local mints were mostly out of business.

Large-denomination copper pieces, iron coins and paper money were only issued during the rule of Emperor Xianfeng (1851-61) to address the government’s financial trouble. Private scrip and foreign currency—silver dollars and bank notes—went into circulation. Marketized currency, including silver taels, private scrip and foreign currency, accounted for half of the monetary aggregates in the late Qing Dynasty.

It was not until 1889 that the Qing court allowed local governments to issue silver dollars, paper money and copper coins. The new currencies came in complicated varieties and had different spheres of circulation, making the monetary system more disorderly.

Coinage, politics integrated
In 1879, France expressed its desire for silver dollars used in its colony Vietnam to be circulated in China. In response, Zeng Jize, Chinese ambassador to Britain and France, expressed the fear that it might go against the government’s priority of making the citizens’ lives easier. Known as a deft expert on Western affairs, Zeng nevertheless held traditional ideas.


The people-oriented money policy gradually ebbed in the early 20th century. After the Gengzi Incident (1900-01), the Qing court implemented the “New Deal” and followed Western economic policy, including “General Rules for Currency of the East and the West.” In 1910, the government promulgated reform schemes, announcing the integration of coinage and politics.

The rise of Europe in modern times cannot be divorced from mercantilism, which advocates intensified government intervention. Economic policy carried out in the Song Dynasty was similar. After the mid-Ming Dynasty, however, minarchists, supporters of limited government, pushed policy in the opposite direction.

The people-focused currency policy was one of the reasons why China fell behind the world. Not until the late Qing court imitated Western policy did minarchism step down from the stage of history along with the backward forms of coinage.

From the evolution of money policy, it can be seen that the Song Dynasty carried forward the tradition of the Han and Tang dynasties. Coinage did not change until the mid-Ming Dynasty. This conflicts with the Tang-Song Transition theory, a prevailing view among historians that Tang and Song are completely different periods.

In another way, it also reveals that history is complicated and gradually changing, reminding us not to blindly accept oversimplified historical models.

Zhang Ning is a professor from the Faculty of History and Culture at Hubei University.