History Of Chinas Currency History Essay

Throughout China ‘s history a signifier of currency has come a long manner. From its crude phases of shells to its modern phases of gold, Cu, and silver the currency system in China has greatly changed over many old ages. The currency in China developed in three major phases: Ancient, Imperial, and the Republic of China.


In ancient China, Sea shells were extremely coveted by ancient people and were used as bestowments or gifts. These shells were lasting and easy to transport about which led to them being used as a beginning of money. Finally the economic system was turning fast and the sea shells could no maintain up so they began to be supplemented by bronze, bone, and clam shells. Historians gave the name Cowry as a general name to depict these shells. “ Peng ” was the basic signifier of shell money, made up of one or two strings incorporating about ten or 20 shells. Tens of 1000s of shells have been discovered in the Yin dynasty ruins at Anyang in the last decennary. First, this proved that they used the shells as burial objects and secondly it shows how long these shells lasted. Scientists believe Cowry shells are the first signifier of currency in cardinal China around 3000-4500 old ages ago. In this crude Chinese authorship system, the characters for buy/sell ‘ ( e?·/e?? ) and other words which related to exchange or swap all contain the extremist ‘e?? ‘ , which is the pictograph for shell. The extent of the circulation of these Cowry shells is still unknown today. Barter trade was thought to rule in the market place. But transcripts of these shells made of wood, bone, rock, and lead and Cu found in ruins such at Anyang are common plenty to say a trade system in them was used.


In a unification effort of China, Qin Shi Huang ( First Emperor of the Qin Dynasty ) got rid of all other signifiers of local currencies and brought forth a national uniform Cu coin which was based on the coins that the Qin had antecedently used. Coins used during this clip, were round with a square hole in the center and this continued to stay the common design for most Cu coins in China up until the 20th century. This act was important because it fixed China ‘s pecuniary signifier which underwent no major alterations over the 2,000 old ages since. Because of the low face value of a individual coin, the people of China traditionally strung a 1000 Cu coins onto a individual piece of twine. However authorities revenue enhancements were charged in both coins and in merchandises such as silk. Workers wages were besides paid in “ rocks ” of grain in both the Qin dynasty and Han dynasties. Book of Pinguai, the records of history reads: “ The Qin coin with a value of half a tael had a diameter of 1.2 cun and a weight of 12 zhu. ” However, about one half of the tael coins from the Qin dynasty that are found today differ in weight and in size. The Qin coins discovered diameters range between 3.2 and 3.4 centimeter and the weight is about 8 gms. This proves that the beginning of pecuniary money during the Qin dynasty was non unvarying and greatly varied.

In the early vocal dynasty, China once more reunited their system of currency and taking other currencies from many topographic points. By the twelvemonth 1000 the fusion of China was complete and China experienced a period of rapid economic growing. In 1073, the best twelvemonth for the minting of coins in the Northern Song, the authorities made an estimated 6 million strings of a 1000 Cu coins each. Historians believe that the northern vocal minted over 200 million strings of coins to be exported to Inner Asia, Japan, and South-East Asia where many times they became the chief mintage used. Merchants during the vocal dynasty rapidly adopted signifiers of paper currency get downing with promissory notes which were called “ winging money. ” The paper currency proved so utile that the province took over the production of the paper currency with the first state-backed printing in 1024. By the 12th century many fluctuations of paper currency had become the dominant signifiers of money in China and were called jiaozi, qianyin, kuaizi, or guanzi. Coins from the vocal dynasty were most complicated. This was caused by the larger assortment and the larger figure of names and rubrics. Every Emperor minted money non merely after coronation, but besides after the alteration of each imperial rubric. Besides, the Fe and bronze coins were in coincident circulation, and each territory had its ain currency. Finally this system led to the, “ regional nature and decentralism of money circulation ” in the Song. However, clout marked in a assortment of calligraphic manners with smooth and elegant shots, it achieved a new degree of artistic preciseness. Dui Qian, brace coins with indistinguishable engravings in different calligraphic manners, became a tendency for a piece.

The Yuan dynasty which was founded by the Mongols ( 1271-1368 ) besides tried to utilize paper currency. During the early period of the dynasty bronze coins were forbidden. They were different from the vocal because they created a incorporate and national system that was non backed by cherished metals such as Ag or gold. The currency that the Yuan issued was the universe ‘s first fiat currency, which was known as Chao. The yuan notes underwent four reforms, giving notes of diverse rubrics, such as Jiao Chao, Zhong Tong Chao, Zhi Yuan Bao Chao, Zhi Da Yin Chao, and Zhi Zheng Jiao Chao. The authorities tried to forbid ownership of Ag or gold and minutess which involved them. In 1268, rising prices made the authorities replace the current paper currency with a new paper currency in 1287, but once more rising prices caused by unmonitored printing remained a large job for the tribunal until the terminal of the Yuan Dynasty.

During the early Ming dynasty ( 1368-1644 ) attempted to utilize a signifier of paper currency in the early re-unification period. Before Zhu Yuanzhang became emperor, he minted Da Zhong Tong Bao coins in Nanjing. After he ascended to the throne, he promulgated the Hong Wu pecuniary system in the first twelvemonth of the Hong Wu reign and ordered the coinage of Hong Wu Tong Bao in the Capital and assorted states. The currency they created besides experienced speedy rising prices and printing was suspended in the twelvemonth 1450 although the notes remained in circulation until 1573. Besides rising prices, widespread counterfeit and deficit of bronze the kwai dynasty system of paper money was revived. For most of the Ming dynasty, China had a private system of money for all minutess. Imported Ag from around the universe began to be used as a signifier of currency in the southern state of Guangdong where it continued to distribute. Finally it became a legal stamp for payment of revenue enhancements. Taxes in a certain state had to be paid to the capital in Ag after the twelvemonth 1465. In China, the demand for Ag was largely met by the Spanish imports from the Americas, such as Peru and Mexico. Though the Ag that was imported was non minted. “ The Ag circulated as metal bars known as sycee or yuanbao which weighed about 36A gms. ”

In the Qing dynasty, bronze and Ag coins were used as parallel criterions. Coins that had a high face value were made of Ag and coins with a low face value were made of bronze. Before the Qing dynasty swayers had conquered many countries south of the Great Wall of China, they had already minted two sorts of bronze coins, the Tian Ming and Tian Cong. Emperor Kang Xi and Qian Long minted bronze coins and they were good shaped and had standard weights. Soon after the reigns of Jia Jing and Dao Guang, little coins kept coming out as the coinage Torahs became slack and less adhering. During the reign of Xian Feng, the taiping Revolution broke out and the authorities was beset with jobs. To run into huge military disbursals, from the 3rd twelvemonth his reign, assorted sorts of coins with great face value, from 10 to 1,000 hard currency, were developed in a assortment of weights and sizes. In the last old ages of his reign, the Qing authorities was compelled to halt coining large coins. By this clip, the system of coins with square holes was on the border of prostration. The currency system continued to be based on Cu and Ag. The Cu system was based on the Cu hard currency which was called “ sebaceous cyst ” . On the other manus the system of Ag had several units in the Qing Dynasty were: “ 1 tael = 10 Mace = 100 candareens = 1000 Li which was known as Ag hard currency. ”

Republic of China

Silver coins

After the Xinhai Revolution toppled the Qing Dynasty, the democracy of China was founded. The authorities in the Nanjing state urgently needed to bring forth military currency for usage in the topographic point of the earlier Qing currency. In the twelvemonth 1914, the National Currency Ordinance made the Silver Dollar the national currency of the Republic of China. Even though designs were much different compared with Imperial coins, the size and metal used in the production of coins stayed largely unchanged until the 1930 ‘s. Most regional batchs shutdown during the 20s and 30s, but some continued until 1949. Later in 1936 the democracy of China coined Cu A? , 1 and 2 fen coins, Ni ( subsequently cupro-nickel ) 5, 10 and 20 fen and A? Yuan coins. 1 and 5 fen pieces were introduced in 1940 and made of aluminium. Unfortunately, the 20s and 30s saw the cost of Ag appreciate in the international market. This led to a monolithic hegira of Ag out of China and caused the prostration of the national currency. It shortly became obvious that the Chinese authorities could n’t maintain the Silver Standard. The state of affairs was made worse by the immense sum of commercial, provincial, and foreign Bankss administering currencies which all were of different values.

Legal Tender

In 1935, the authorities started currency reform and merely granted the issue of currency to: the Bank of China, Central Bank of China, Bank of Communications and subsequently the Farmers Bank of China. They made the circulation of Silver Dollars illegal, and personal ownership of Ag was outlawed. To take its topographic point, a new currency is issued and was known as ??•a?? Pinyin: fCZbi or “ Legal Tender ” .

Customss Gold Unit of measurements

The cardinal bank of china issued imposts gilded units to do possible payment of responsibilities on imported goods. The CGUs did n’t endure from hyperinflation like that of the national currency because the CGUs were pegged to the United States Dollar at 1 Customss Gold Unit = US $ 0.40. However, in 1935 the nog was removed and the bank allowed Customs Gold Units to be free for general usage. Already soaked with excessively much paper currency, the Customs Gold Units merely added to the out of control hyperinflation.


In 1945, the Central Bank of China issued a different currency in the northeast portion of China to take the topographic point of those issued by other puppet Bankss. Its name was “ ??±a?-a??c???µ?eˆsa?? ” , and it was deserving approximately 10 times more than fCZbi go arounding throughout China. In 1948 it was replaced with the Gold Yuan. Yuan in north east states was an attempt to divide specific countries of China from the hyperinflation which had plagued the old fCZbi currency.

Gold Yuan

After WWII, the fCZbi currency saw a rapid devaluation. The devaluation was chiefly due to uncontrolled issue of the currency to assist the war attempt be funded. After WWII and the return of the Central Government set uping power, an extra reform was put away in the August of 1948 in answer to the hyperinflation. “ The new Gold Yuan replaced the fCZbi currency at the rate of 1 Gold Yuan equals 3 million Yuan fCZbi peers United States Dollars 0.25. ” The Gold Yuan was purportedly put at 0.22217grams of gold, nevertheless, the currency was ne’er truly backed by any gold it was merely said to be, but because of dishonesty the hyperinflation continued.


At last, in 1949, the cardinal authorities which was the Kuomintang one time more announced a new reform. This new reform introduced the Silver Yuan and brought China back to the silver criterion. The Silver Yuan would be traded at one Silver Yuan equaled 100,000,000 and was more successful than the Gold Yuan because it was really backed up by Ag which was minted by the authorities ‘s Central Mint of China. However, the currency was brief because the Communist Party shortly had control of the Mainland of China. It was finally replaced by a currency that was less prone to rising prices that was issued by the Central Bank of China.

Following the departure of the Kuomintang to Taiwan, the Silver Yuan stayed the legal currency of the Republic of China. This was irrespective of the fact that merely Taiwan Dollars minted by the Taiwan bank were in circulation in countries controlled by the ROC. “ After the reform of currency in 1949, the legal trade rate was put at 1 Silver Yuan equals NT $ 3. An amendment was passed in 2000 to do the New Taiwan Dollar the official legal currency of the Republic of China. ”