The economy of the

Ming dynasty The Ming dynasty (), officially the Great Ming, was an Dynasties in Chinese history, imperial dynasty of China, ruling from 1368 to 1644 following the collapse of the Mongol Empire, Mongol-led Yuan dynasty. The Ming dynasty was the last ort ...

(1368–1644) of

China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...

was the largest in the world during that period. It is regarded as one of China's three major

golden ages A golden age is a period considered the apotheosis in the history of a country or people, a time period when the greatness, greatest achievements were made. The term originated from early ancient Greece, Greek and ancient Rome, Roman poets, who ...

(the other two being the

Han Han may refer to: Ethnic groups * Han Chinese, or Han People (): the name for the largest ethnic group in China, which also constitutes the world's largest ethnic group. ** Han Taiwanese (): the name for the ethnic group of the Taiwanese p ...

and

Tang Tang or TANG most often refers to: * Tang dynasty * Tang (drink mix) Tang or TANG may also refer to: Chinese states and dynasties * Jin (Chinese state) (11th century – 376 BC), a state during the Spring and Autumn period, called Tang (唐) b ...

periods). The period was marked by the increasing political influence of the

merchant A merchant is a person who trades in commodities produced by other people, especially one who trades with foreign countries. Historically, a merchant is anyone who is involved in business or trade. Merchants have operated for as long as indust ...

s, the gradual weakening of imperial rule, and technological advances.

Currency

The early

attempted to use paper currency, with outflows of

bullion Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes from t ...

limited by its ban on private foreign commerce. Like its forebears, the currency experienced massive

counterfeit To counterfeit means to imitate something authentic, with the intent to steal, destroy, or replace the original, for use in illegal transactions, or otherwise to deceive individuals into believing that the fake is of equal or greater value tha ...

ing and hyperinflation. (In 1425, Ming notes were trading at about 0.014% of its original value under the Hongwu Emperor.) The notes remained in circulation as late as 1573 but their printing was ended in 1450. Minor coins were minted in base metals, but trade mostly occurred using silver ingots. As their purity and exact weight varied, they were treated as

and measured in

tael Tael (),"Tael" entry
at the

sycee A sycee (;.. from Cantonese , , ). or yuanbao () was a type of gold and silver ingot currency used in imperial China from its founding under the Qin dynasty until the fall of the Qing in the 20th century. Sycee were not made by a central ban ...

" first came into use in

Guangdong Guangdong (, ), alternatively romanized as Canton or Kwangtung, is a coastal province in South China on the north shore of the South China Sea. The capital of the province is Guangzhou. With a population of 126.01 million (as of 2020) ...

, spreading to the

lower Yangtze The Yangtze Delta or Yangtze River Delta (YRD, or simply ) is a triangle-shaped megalopolis generally comprising the Wu Chinese-speaking areas of Shanghai, southern Jiangsu and northern Zhejiang. The area lies in the heart of the Jiangnan reg ...

sometime before 1423, the year it became acceptable for payment of tax obligations. In the mid-15th century, the paucity of circulating silver caused a monetary contraction and extensive reversion to barter. The problem was met through smuggled, then legal, importation of Japanese silver (mostly through the Portuguese and Dutch) and Spanish silver from

Potosí Potosí, known as Villa Imperial de Potosí in the colonial period, is the capital city and a municipality of the Department of Potosí in Bolivia. It is one of the highest cities in the world at a nominal . For centuries, it was the location o ...

carried on the

Manila galleons fil, Galyon ng Maynila , english_name = Manila Galleon , duration = From 1565 to 1815 (250 years) , venue = Between Manila and Acapulco , location = New Spain (Spanish Empire) ...

. Provincial taxes were required to be paid in silver in 1465; the salt tax, in 1475; and corvée exemptions, in 1485. By the late Ming, the amount of silver being used was extraordinary: at a time when

English English usually refers to: * English language * English people English may also refer to: Peoples, culture, and language * ''English'', an adjective for something of, from, or related to England ** English national ide ...

traders considered tens of thousands of pounds an exceptional fortune, the Zheng clan of merchants regularly engaged in transactions valued at millions of

tael Tael (),"Tael" entry
at the

Spanish South America and China at about the same time the new

Tokugawa shogunate The Tokugawa shogunate (, Japanese 徳川幕府 ''Tokugawa bakufu''), also known as the , was the military government of Japan during the Edo period from 1603 to 1868. Nussbaum, Louis-Frédéric. (2005)"''Tokugawa-jidai''"in ''Japan Encyclopedia ...

in Japan restricted most of its foreign exports, cutting off Dutch and Portuguese access to its silver. The dramatic spike in silver's value in China made payment of taxes nearly impossible for most provinces. ''In extremis'', the government even resumed use of paper currency amid

Li Zicheng Li Zicheng (22 September 1606 – 1645), born Li Hongji, also known by the nickname, Dashing King, was a Chinese peasant rebel leader who overthrew the Ming dynasty in 1644 and ruled over northern China briefly as the emperor of the short-li ...

's rebellion.

Manufactures

Privatization

Another key feature of the Ming manufacturing industry was

privatization Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...

. Unlike the

Song A song is a musical composition intended to be performed by the human voice. This is often done at distinct and fixed pitches (melodies) using patterns of sound and silence. Songs contain various forms, such as those including the repetitio ...

, in which

state-owned enterprises A state-owned enterprise (SOE) is a government entity which is established or nationalised by the ''national government'' or ''provincial government'' by an executive order or an act of legislation in order to earn profit for the governmen ...

played a large role, the Ming reverted to the old laissez faire policies of the

by privatizing the salt and tea industries. By the middle of the Ming dynasty, powerful groups of wealthy merchants had replaced the state as the dominant movers behind Chinese industry.

Emergence of wage labor

The Ming government abolished the mandatory forced labor by peasants used in early dynasties and replaced it with

wage labor Wage labour (also wage labor in American English), usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under a ...

. A new class of wage laborers sprung up where none had existed before. In Jingde alone, it was reported that there were no less than 300 pottery factories, all operated by wage laborers.Li Bo, Zheng Yin, "5000 years of Chinese history", Inner Mongolian People's publishing corp, 2001, , pp. 994–997.

Early encouragement of agriculture under Hongwu Emperor

In order to recover from the wars during the late

Yuan dynasty The Yuan dynasty (), officially the Great Yuan (; xng, , , literally "Great Yuan State"), was a Mongol-led imperial dynasty of China and a successor state to the Mongol Empire after its division. It was established by Kublai, the fifth ...

, the

Hongwu Emperor The Hongwu Emperor (21 October 1328 – 24 June 1398), personal name Zhu Yuanzhang (), courtesy name Guorui (), was the founding emperor of the Ming dynasty of China, reigning from 1368 to 1398. As famine, plagues and peasant revolts in ...

enacted pro-agricultural policies. The state invested extensively in agricultural canals, reduced taxes on agriculture to 1/30 of the output, and later to 1.5% of agricultural output. Ming farmers also introduced many innovations such as water-powered plows, and new agricultural methods such as crop rotation. This led to a massive agricultural surplus that became the basis of a market economy.

Emergence of commercial plantations

The Ming saw the rise of commercial plantations who produced crops suitable to their regions. Tea, fruits, paint and other goods were produced on a massive scale by these agricultural plantations. Regional patterns of production established during this period continued into the Qing dynasty. The

Columbian exchange The Columbian exchange, also known as the Columbian interchange, was the widespread transfer of plants, animals, precious metals, commodities, culture, human populations, technology, diseases, and ideas between the New World (the Americas) in ...

brought crops such as

corn Maize ( ; ''Zea mays'' subsp. ''mays'', from es, maíz after tnq, mahiz), also known as corn (North American and Australian English), is a cereal grain first domesticated by indigenous peoples in southern Mexico about 10,000 years ago. Th ...

with these foreign crops. During the Ming, specialized areas also popped up planting large numbers of cash crops that could be sold at markets. Large numbers of peasants abandoned the land to become artisans. The population of the Ming boomed; estimates for the population of the Ming range from 160 to 200 million.

Rural markets during the Ming

Ming agriculture was much changed from the earlier areas; firstly, gigantic areas, devoting and specializing in cash crops, sprung up to demand from the new market economy. Secondly, agricultural tools and carts, some water-powered, help to create a gigantic agricultural surplus which formed the basis of the rural economy. Besides rice, other crops were grown on a large scale. Although images of autarkic farmers who had no connection to the rest of China may have some merit for the earlier Han and T'ang dynasties, this was certainly not the case for the Ming dynasty. During the Ming dynasty, the increase in population and the decrease in quality land made it necessary that farmers make a living off cash crops. Many of these markets appeared in the rural countryside, where goods were exchanged and bartered.Twitchett, Denis; John K.Fairbank. the Ming dynasty part 2 (May 1987), The Cambridge History of China, , pp. 497–498. A second type of market that developed in China was the urban-rural type, in which rural goods were sold to urban dwellers. This was particular the case when landlords decided to reside in the cities, and use income coming from rural land holding to facilitate exchange in the cities. Another way this type of market was used was professional merchants who bought rural goods in large quantities. The third type of market was the "national market" which was developed during the Song dynasty but particularly enhanced during the Ming. This market involved not only the exchange described above, but also products produced directly for the market. Unlike earlier dynasties, many Ming peasants were no longer producing only products they needed; many of them produced products for the market, which then they sold at a profit.

Trade and investment

In the early Ming, after the devastation of the war which expelled the Mongols, the

imposed severe restrictions on trade (the "''haijin''"). Believing that agriculture was the basis of the economy, Hongwu favored that industry over all else, including that of merchants. After his death, most of his policies were reversed by his successors. By the late Ming, the state was losing power to the very merchants which Hongwu had wanted to restrict. The Ming dynasty also engaged in a thriving trade with both Europe and Japan. The amount of silver flowing into the Ming dynasty was estimated by Joseph Needham at 300 million taels, which is equivalent to more than 190 billion dollars in today's money. In addition to silver, the Ming also imported many European firearms, in order to ensure the modernness of their weapons. Trade and commerce thrived in this liberalized economy, and was aided by the construction of

canal Canals or artificial waterways are waterways or engineered channels built for drainage management (e.g. flood control and irrigation) or for conveyancing water transport vehicles (e.g. water taxi). They carry free, calm surface flow un ...

road A road is a linear way for the conveyance of traffic that mostly has an improved surface for use by vehicles (motorized and non-motorized) and pedestrians. Unlike streets, the main function of roads is transportation. There are many types of ...

s, and

bridge A bridge is a structure built to span a physical obstacle (such as a body of water, valley, road, or rail) without blocking the way underneath. It is constructed for the purpose of providing passage over the obstacle, which is usually somethi ...

s by the Ming government. The Ming saw the rise of several merchant clans such as the Huai and Jin clans, who disposed of large amounts of wealth. The

gentry Gentry (from Old French ''genterie'', from ''gentil'', "high-born, noble") are "well-born, genteel and well-bred people" of high social class, especially in the past. Word similar to gentle imple and decentfamilies ''Gentry'', in its widest ...

and merchant classes started to fuse, and the merchants gained power at the expense of the state. Some merchants were reputed to have a treasure of 30 million taels. China acted as the cog running the wheel of global trade. Trade with Japan continued unobstructed despite the embargo, through Chinese smugglers, Southeast Asian ports, or Portuguese. China was entirely integrated in the world trading system. European nations had a great desire for Chinese goods such as

silk Silk is a natural protein fiber, some forms of which can be woven into textiles. The protein fiber of silk is composed mainly of fibroin and is produced by certain insect larvae to form cocoons. The best-known silk is obtained from the coc ...

and

porcelain Porcelain () is a ceramic material made by heating substances, generally including materials such as kaolinite, in a kiln to temperatures between . The strength and translucence of porcelain, relative to other types of pottery, arises mainl ...

. The Europeans did not have any goods or commodities which China desired, so they traded silver to make up for their trade deficit. Spaniards at the time of the

Age of Exploration The Age of Discovery (or the Age of Exploration), also known as the early modern period, was a period largely overlapping with the Age of Sail, approximately from the 15th century to the 17th century in European history, during which seafari ...

discovered vast amounts of silver, much of which was from the

silver mines, to fuel their trade economy. Spanish American silver mines were the world's cheapest sources of it, producing 40,000 tons of silver in 200 years. The ultimate destination for the mass amounts of silver produced in the Americas and Japan was China. From 1500 to 1800, Mexico and Peru produced about 80% of the world's silver with 30% of it eventually ending up in China. In the late 16th and early 17th century, Japan was also exporting silver heavily into China. Silver from the Americas flowed mostly across the Atlantic and made its way to the far east. Major outposts for the silver trade were located in Southeast Asian countries, such as the Philippines. The city of Manila served as a primary outpost of the exchange of goods between the Americas, Japan, Indian, Indonesia and China. However, there was a large amount of silver that crossed across the Pacific Ocean directly from the Americas as well. Trade with

Ming China The Ming dynasty (), officially the Great Ming, was an imperial dynasty of China, ruling from 1368 to 1644 following the collapse of the Mongol-led Yuan dynasty. The Ming dynasty was the last orthodox dynasty of China ruled by the Han peop ...

via Manila served a major source of revenue for the

Spanish Empire The Spanish Empire ( es, link=no, Imperio español), also known as the Hispanic Monarchy ( es, link=no, Monarquía Hispánica) or the Catholic Monarchy ( es, link=no, Monarquía Católica) was a colonial empire governed by Spain and its prede ...

and as a fundamental source of income for Spanish colonists in the Philippine Islands. Until 1593, two or more ships would set sail annually from each port. The galleon trade was supplied by merchants largely from port areas of

Fujian Fujian (; alternately romanized as Fukien or Hokkien) is a province on the southeastern coast of China. Fujian is bordered by Zhejiang to the north, Jiangxi to the west, Guangdong to the south, and the Taiwan Strait to the east. Its capi ...

who traveled to Manila to sell the Spaniards spices,

, ivory, lacquerware, processed

cloth and other valuable commodities. Cargoes varied from one voyage to another but often included goods from all over Asia - jade, wax, gunpowder and silk from China; amber, cotton and rugs from India; spices from Indonesia and Malaysia; and a variety of goods from Japan, including fans, chests, screens and porcelain.

Taxation

Ming taxation was light. Taxes on agriculture were only 1/30 of agricultural produce, and were later reduced to 1/50 of produce. Taxes on commerce amounted to 1/30 of commerce also, but was later reduced to 1.5%. These low taxes spurred trade, but severely weakened the state. Salt, as in earlier dynasties, was an important source of state revenue, but required constant and competent management. With the coming of the

Little Ice Age The Little Ice Age (LIA) was a period of regional cooling, particularly pronounced in the North Atlantic region. It was not a true ice age of global extent. The term was introduced into scientific literature by François E. Matthes in 1939. Ma ...

in the 17th century, the state's low revenues and its inability to raise taxes caused massive deficits, and large numbers of Ming troops defected or rebelled because they had not been paid.

Weakening of the state

During the Ming, the controls imposed on the economy were gradually relaxed.

State monopolies In economics, a government monopoly or public monopoly is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law. It is a monopoly ...

salt Salt is a mineral composed primarily of sodium chloride (NaCl), a chemical compound belonging to the larger class of salts; salt in the form of a natural crystalline mineral is known as rock salt or halite. Salt is present in vast quantitie ...

and iron ended as these and other industries were privatized. Taxes were reduced from the high levels under the Mongol Yuan, and the Ming had one of the lowest tax rates (per person) in the world. The entire foreign trade, which was estimated at up to 300 million taels, provided the Ming with a tax of only about 40,000 taels a year. When the Wanli Emperor sought to increase the salt tax, his measures were opposed by violence and the eunuchs he sent to collect the tax were beheaded by local officials.

Sprouts of capitalism

Investment and capital moved off the land and were poured into ventures. Continuing the trend from the Song, Ming investors poured large amounts of capital into ventures and reaped high profits. Many Chinese scholars believe the Ming was the dynasty in which the "

sprouts of capitalism The sprouts of capitalism, seeds of capitalism or capitalist sprouts are features of the economy of the late Ming and early Qing dynasties (16th to 18th centuries) that mainland Chinese historians have seen as resembling developments in pre-industr ...

" emerged in China, only to be suppressed by the Qing Dynasty. This theory was widely promoted by Communist scholars during the Maoist period, and suffers from that period's general condemnation of the Manchu Qing, who were accused of mis-managing the Chinese state in the face of foreign encroachment.

References

External links

China’s GDP in the Ming Dynasty Guan Hanhui David Daokui Li
{{Economic history of China Ming dynasty Economic history of China Medieval economics 16th-century economic history 17th-century economic history