Currency In Ancient China

The history of Chinese currency spans more than 3000 years. Currency of some type has been used in China since the Neolithic age which can be traced back to between 3000 and 4500 years ago. Cowry shells are believed to have been the earliest form of currency used in Central China, and were used during the Neolithic period.

Around 210 BC, the first emperor of China Qin Shi Huang (260–210 BC) abolished all other forms of local currency and introduced a uniform copper coin. Paper money was invented in China in the 9th century, but the base unit of currency remained the copper coin. Copper coins were used as the chief denomination of currency in China until the introduction of the yuan.

Currently, the ''renminbi'' is the official currency of the People's Republic of China (PRC). It is the legal tender in mainland China, but not in Hong Kong or Macau. The special administrative regions of Hong Kong and Macau use the Hong Kong dollar and the Macanese pataca, respectively. In the Republic of China (ROC), the ''New Taiwan dollar'' is the official legal tender in Taiwan since 2000.

Ancient currencies

The use of shell money is attested to in the Chinese writing system. The traditional characters for 'goods' (), 'buy/sell' (), and 'monger' (), in addition to various other words relating to 'exchange', all contain the radical , which is the pictograph for shell ( simplified to ). The extent of the circulation of shell money is unknown, and barter trade may have been common. However, copies of cowry shells made out of bone, wood, stone, lead and copper were common enough to presume that they were used in trade.

The Chinese may have invented the first metal coins, coins found in Anyang date to before 900 BC. At that time, the coin itself was a mock of more earlier used cowry shells, so it was called the Bronze shell.

Bronzed shells were found in the ruins of Yin, the old capital of the Shang dynasty (1500–1046 BC). Bronze became the universal currency during the succeeding Zhou dynasty. During the Warring States period, from the 5th century BC to 221 BC, Chinese money was in the form of bronze objects that were of three main types. The Zhou, the Wei (), the Han () and the Qin () all used coins shaped like a spade (''bu''). The Qi () used money in the shape of a knife (''dao''). The Zhao () and the Yan () used knife money before switching over to spade money roughly halfway through the Warring States period. The Chu () used money in the forms of " ant nose" coins (''yibi'').

Unification

As part of the Unification of China, Qin Shi Huang (, 260 BC – 210 BC) introduced a uniform copper coin with the inscription "Ban Liang" based on the coins previously used by Qin. All other forms of local currency were abolished. The coins were round with a square hole in the middle which was the common design for most Chinese copper coins until the 20th century. Due to the low value of an individual coin, the Chinese have traditionally strung a nominal thousand copper coins onto a piece of string. Government taxes were levied on both coins and products such as rolls of silk. Salaries were paid in "stones" (, ''dàn'') of grain during the Qin and Han dynasties.

Tang

Tang merchants rapidly adopted forms of paper currency starting with promissory notes in Sichuan called "flying money" (''feiqian''). These proved so useful the state took over production of this form of paper money with the first state-backed printing in 1024. By the 12th century, various forms of paper money had become the dominant forms of currency in China and were known by a variety of names such as ''jiaozi'', '' huizi'', '' kuaizi'', or '' guanzi''.

Song

During the early Song dynasty (Chinese: , 960–1279), China again reunited the currency system displacing coinages from ten or so independent states. Among pre-Song coins, the northern states tended to prefer copper coins. The southern states tended to use lead or iron coins with Sichuan with its own heavy iron coins which continued to circulate for a short period into the Song dynasty. By 1000 CE, unification (south of the Liao) was complete and China experienced a period of rapid economic growth. This was reflected in the growth of coining. In 1073—the peak year for minting coins in the Northern Song—the government produced an estimated six million strings containing a thousand copper coins each. The Northern Song is thought to have minted over two hundred million strings of coins which were often exported to Inner Asia, Japan, and South-East Asia, where they often formed the dominant form of coinage.

Yuan

The Mongol-founded Yuan dynasty (Chinese: , 1271–1368) also attempted to use paper currency. Unlike the Tang dynasty, they created a unified, national system that was not backed by silver or gold. The currency issued by the Yuan was the world's first fiat currency, known as Jiaochao. The Yuan government attempted to prohibit all transactions in or possession of silver or gold, which had to be turned over to the government. Inflation in 1260 caused the government to replace the existing paper currency with a new one in 1287, but inflation that resulted from undisciplined printing remained a problem for the Yuan court until the end of the Yuan dynasty.

Ming

The early Ming dynasty (, 1368–1644) also attempted to use paper currency in the early re-unification period. This currency also experienced rapid inflation and issues were suspended in 1450 although notes remained in circulation until 1573. It was only in the very last years of the Ming dynasty when Li Zicheng threatened Beijing in 1643 and 1645 that printing took place again. For most of the Ming China had a purely private system of currency for all important transactions. Silver, which flowed in from overseas, began to be used as a currency in the Far South province of Guangdong where it spread to the lower Yangtze region by 1423 when it became legal tender for payment of taxes. Provincial taxes had to be remitted to the capital in silver after 1465, salt producers had to pay in silver from 1475 and corvée exemptions had to be paid in silver from 1485. The Chinese demand for silver was met by traditional maritime silk road trade links, from either Quanzhou, Zhangzhou, Guangzhou, or Macau, with Manila in the Philippines as part of the Spanish East Indies who traded Philippine peso ( Spanish silver dollars) for chinaware and other trade goods, after the Spanish colonial empire became established at Manila in 1571. The Spanish silver dollar were minted and mined from the Spanish Americas, in particular Potosí in Peru and Mexico. The trade of Spanish silver dollars with chinaware and other trade goods flowed through the Manila-Acapulco Galleon Trade from the Philippines to Mexico and vice versa within the Spanish colonial empire. It circulated as minted Spanish dollars sometimes stamped with Chinese characters known as "chop marks" which indicated that they were verified by a merchant and determined to be genuine. Spanish silver also circulated as ingots (known as sycee or ''yuanbao'') which weighed a nominal ''liang'' (about 36 grams) although purity and weight varied from region to region. The ''liang'' was often referred to by Europeans by the Malay term ''tael