Cycles of silver in Chinese monetary history

Silver played a distinctive role in the economy of premodern China, a role all the more unusual given that Chinese imperial governments did not issue a silver currency before 1889. Even in the absence of an official silver currency, the Ming dynasty (1368–1644) gradually adopted a fiscal system based on silver. From the fifteenth century onward, China remained on a silver standard until the Guomindang government’s currency reform of 1935, well after the nearly universal adoption of the gold standard elsewhere in the world in the late nineteenth century. Chinese and Japanese scholars have long recognized that the massive importing of foreign silver from Japan and the Spanish Americas was the crucial force behind the dramatic acceleration in commercial growth in the late Ming. ¹ Western scholarship also has acknowledged the stimulative effect of foreign silver on the Chinese economy, but it has tended to emphasize the adverse effects of China’s incorporation into the global economy through its imports of foreign silver. Thus, the drain of silver abroad to pay for opium imports has been seen as triggering the most cataclysmic event in nineteenth-century China, the Opium War of 1839–1842, leading to China’s subordination to the European-dominated capitalist economy (Greenberg 1951: 142–143; Moulder 1977: 100–102, 142–144). ² Similarly, an unhealthy dependency on imports of foreign silver has been cited as a key factor in the fall of the Ming dynasty in 1644 (Atwell 1982, 1986; Wakeman 1986). ³