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Monetization of Silver under Ming Dynasty: One of Important Symbols of China's Traditional Economic Transformation

The evolution and development of currency is evidence of economic development of country. During Shang Dynasty, Chinese generally used shells as a currency, so all characters next to character shell were associated with wealth, such as Cai, Gong, Jia, Bribe, Zi, etc. After Western Zhou Dynasty, with improvement of metal smelting technology, metallic currency replaced natural currency. The Qin Dynasty promoted round and square hole coins, and since then copper coins have become main form of ancient Chinese currency. In Song dynasty, in connection with high development of commodity economy, a prototype of banknotes appeared - jiaozi. In ancient world, silver was an international currency. With continuous development of China's trade with countries of world, silver eventually became main currency of China. The Ming Dynasty was a critical period for monetization of silver in China, which was inseparable from domestic and foreign situation of time. The monetization of silver reflects beginning of China's integration into world market, and also reflects new developments in China's commodity economy.

1. Legalization of circulation of silver in Ming Dynasty

During Tang and Song dynasties, prosperity of China's foreign trade made silver an important trading currency. At that time, silver currency was mainly in form of a ship, reflecting that it was mainly used for international trade, and other was used to combat counterfeiting. At same time, banknotes began to appear in Song Dynasty, which also had an important impact on later generations. During Yuan Dynasty, government issued a large number of banknotes - banknotes, which led to a strong depreciation, and people suffered greatly from this, so they had to trade in kind.

Monetization of Silver under Ming Dynasty: One of Important Symbols of China's Traditional Economic Transformation

Banknotes of Yuan Dynasty

In early Ming Dynasty, to reverse currency chaos at end of Yuan Dynasty, copper coins were ubiquitous. At first, Dazhong Tongbao money was popular, and later Hongwu Tongbao money was introduced. However, due to shortage of copper materials at that time, there were few coins, and at same time a lot of them flowed out of country, which led to difficulties in supply of copper coins. Thus, Minsk court "is responsible for making sure that people produce copper, and that people destroy utensils and lose officials, which is rather bitter." In addition, copper coins are heavy, but their value is low, so they are not suitable for long-distance transportation, which limits development of trade. trade suffers from weight of copper coins and cannot go far.” So at that time, many people still used Yuan Dynasty paper money.

Monetization of Silver under Ming Dynasty: One of Important Symbols of China's Traditional Economic Transformation

Ming dynasty copper coins

In response to this phenomenon, Zhu Yuanzhang ordered new banknotes to be issued. In 1374, Zhu Yuanzhang established a department for lifting treasure banknotes in central government, and also set up a banknote production and banknote printing bureau under him, after which he began to print "Daming treasure banknotes." After paper money was issued to ensure circulation of paper money, ordinary people were strictly prohibited from using Yuan Dynasty paper money, gold and silver. When levying trade taxes, only banknotes and copper coins are collected. By 1394, even copper coins were forbidden, and Daming Baochao became only legal currency. However, people do not have much confidence in paper money, because paper money will soon depreciate due to excessive issuance. So people used gold and silver for trading one after another, but government repeatedly forbade it. From Hongwu period to Yongle period, and then to Xuande period, ban on transactions with gold and silver was constantly repeated, but it was obviously impossible to implement it.

Monetization of Silver under Ming Dynasty: One of Important Symbols of China's Traditional Economic Transformation

Precious banknotes and copper coins of Ming Dynasty

Thus, Ming Dynasty's policy of promoting paper money was declared a failure. During Zhengtong period, Ming Dynasty began to change its policy and allowed people to use gold and silver. In first year of Zhengtong (1436), Ming court announced "order to collect tax on rice, wheat and silver", that is, tax would be converted into silver taels for collection, which means that silver became legal currency of Ming dynasty. During Tianshun period, ban on use of silver was again lifted. During Jiajing period, silver was mainly used in government's income and expenditure, and silver also became unit of measure for country's financial income and expenditure, all popular goods were valued in silver. real, and silver collected by state, I do not know that this is rice. ; for those less than one coin, no money is allowed." This is first time that Ming Dynasty explicitly stipulates use of silver.

Monetization of Silver under Ming Dynasty: One of Important Symbols of China's Traditional Economic Transformation

Ming Silver

Second, source of silver: ensuring monetization of silver.

Silver has become main currency in circulation in society, so a large number of sources of silver will inevitably be required. The source of silver during Ming Dynasty was mainly government mining and influx of foreign countries. Gu Yanwu once said, "The source of silver is silver from gravel and silver from ships."

Silver is country's legal currency, so development of silver mines should be in hands of government. The Ming Dynasty established that no one could open a silver mine privately, and anyone who violated it would be severely punished. The Ming Dynasty government has two ways to mine silver, one is that government establishes establishments in silver mines for direct mining, other is to order local authorities to force local businessmen to invest in mining.

Monetization of Silver under Ming Dynasty: One of Important Symbols of China's Traditional Economic Transformation

Ming Dynasty Silver Mine Ruins

During Hongwu period, due to ban on circulation of silver, only Fujian and Zhejiang had a few silver farms in country. During Yongle period, tribute trade flourished, which required a large amount of silver, so silver mines were controlled and opened throughout country, and silver farms were established throughout country. During Yongle period, country's tax revenue reached 5 million taels, highest in history. In Renxuan period, number of mined silver mines was not as large as in Yongle period, but number was also very objective: from first year of Xuande to ninth year of Xuande, there were 2.3 million taels.

Since time of Emperor Yingzong of Ming Dynasty, silver market in Ming Dynasty has been volatile, and income of silver taels has also been very unstable. During Jiajing period, when silver gradually became main currency, government increased scale of mining, reaching a total of 4.82 million taels. During Wanli period, due to frequent wars and unprecedented demand for silver, silver farms were established throughout country. However, during this time there were sharp social conflicts and serious corruption, resulting in inadequate silver actually entering treasury. After 1620, Ming Dynasty "abolished all mining taxes in world" and since then, silver mining has gone beyond scale.

Monetization of Silver under Ming Dynasty: One of Important Symbols of China's Traditional Economic Transformation

In fact, main source of silver during Ming Dynasty was overseas trade. During 200 years of Ming maritime prohibition, outflow of silver was very serious because government often used silver to "reward" foreign missions. However, this phenomenon began to change during Longqing period. In 1567, Longqing announced restoration of Department of Maritime Navigation and allowed private merchants to conduct foreign trade in Yuegang, Fujian, which opened mouth of maritime ban. Since then, private trade between China and rest of world has grown rapidly. At this time, Spain and Portugal opened new sea routes and established economic exchanges with China. Spain mined large amounts of silver in Americas and monopolized 80% of world's silver production. Spain, on other hand, used large quantities of silver to purchase china, tea, and other materials from China, which allowed silver to enter China on a large scale. According to statistics, from discovery of Longqing to end of Ming Dynasty, about 40 million taels of silver flowed to China from Philippines.

Millions of pesos of silver goods shipped from New Spain (Himo, Peru, etc.) every year, contrary to order of His Majesty, all flowed into pagan China ”- Report of Archbishop of Manila to King of Spain Monetization of Silver under Ming Dynasty: One of Important Symbols of China's Traditional Economic Transformation

Sowing of economic crops at end of Ming dynasty

Surprisingly, amount of silver entering China from Japan far exceeds that from Spain. Japan's resources are scarce, but silver mines are relatively rich. At same time, Japan also had an advantage in trade with Spain, which caused a lot of silver to flow into Japan. However, smuggling between Japan and China is very thriving, and Japan has a great demand for Chinese products: "Most of what Japan needs is made in China." Therefore, Japan used its rich silver resources for smuggling with Chinese businessmen. The reason it is called smuggling is because Ming Dynasty banned private trade with Japan. In trade between China and Japan, large amounts of Japanese silver also flowed to China. The "Internal Silver Mining in Ming Dynasty and Several Parts of Foreign Influx" mentions that from 1601 to 1640, East Asia received a total of about 160 million taels of silver, of which 120 million taels came from Japan and mostly flowed to China. In addition to Japan and Spain, a large amount of silver flowed to China from Portugal.

Third, impact of silver monetization on Ming Dynasty.

Silver as a precious metal currency has a much more stable value than banknotes and copper coins. When silver became main currency of society, commercial development of Ming Dynasty became more stable and trading capital became more active, which greatly contributed to development of commodity economy. Silver has a higher value and is more suitable for long-distance trade and commodity trade than copper coins, which contributes to growth of national trade. During Ming Dynasty, trading groups such as Shanxi merchants, Huizhou merchants, Guangdong merchants, Fujian merchants, and Wuyue merchants emerged, which were mainly engaged in long-distance trade and wholesale of goods.

Monetization of Silver under Ming Dynasty: One of Important Symbols of China's Traditional Economic Transformation


As a world currency at time, silver was link to global economy. The monetization of silver under Ming Dynasty also accelerated connection between domestic economy and world market, which promoted economic exchange and cultural ties between China and foreign countries. During late Ming Dynasty, economic ties between coastal regions of China and foreign countries were clearly strengthened, for example, textile industry prospered very much, and many handicraft factories appeared. Historians call this phenomenon "germination of capitalism".

Monetization of Silver under Ming Dynasty: One of Important Symbols of China's Traditional Economic Transformation

Silver monetization had a great impact on Ming government. Thanks to large-scale influx of silver, income of Ming treasury increased significantly. The influx of silver will inevitably also contribute to an increase in income of treasury of Minsk government. Prior to discovery of Longqing, income of Ming treasury was mainly dependent on domestic agriculture; after discovery of Longqing, silver in silver treasury increased rapidly from 2.3 million taels in 1570 to 4.3 million taels in Wanli in five years. . At that time, expansion of treasury during Wanli period was directly affected by Zhang Jiuzhen's reform, but "one-whip method" in Zhang Jiuzhen's reform was also result of monetization of silver.

In 1581, Zhang Jiuzhen enacted "One Whip Law", that is, he combined past land tax, population tax, corvée and various taxes into one and collected silver according to number of acres of land. The move signifies that taxation in China has officially moved from being taxed in kind to being taxed in cash. At same time, this reform also weakened personal dependence of peasants, who adapted themselves to development of a commodity economy. The introduction of One Whip Law was a symbolic event in China's tax reform. The "One Whip Law" was silver currency of Ming Dynasty. At same time, whip method also contributed to a further expansion of volume of silver circulation.


The monetization of silver is one of landmark events of transition from Ming and Qing dynasties to modernity in China. In addition, there has been growth of trading gangs, widespread cultivation of cash crops, growth of Western learning, emergence of enlightenment thoughts, etc. However, due to closed measures and pressure measures taken by Ming and Qing governments in general, China's modernization transformation has met with resistance. Therefore, impact of silver monetization is also limited. No event is an isolated event The monetization of silver reflects changes in Chinese economy and is also an important manifestation of changes in global pattern.

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