Historical Studies (Chinese Edition)

No.3, 2018

 

Abnormal Shocks to the Silver Exchange Rate in the Early 20th Century and Their Impact on the Chinese Economy (Abstract)

 

Du Xuncheng

 

From the 19th century on, an increasing number of countries adopted the gold standard. Since the 1970s, the longterm trend has been for gold to appreciate and silver to depreciate. China, however, had long used silver and copper for its coinage. In the Republican era, the silver exchange rate experienced two abnormal shocks, one during 1919-1921 and the other during 1930-1935. These fluctuations in the silver exchange rate arose because Western countries shifted their crises to other countries, with a profound negative effect on the Chinese economy. During these crises, the whole Chinese economy suffered interlocking losses. Faced with these crises, China was in a totally passive and weak position, lacking the financial and monetary strategies and economic policy measures required to deal with and resolve the crises in a timely manner.