History of Chinese currency
This article needs additional citations for verification. (November 2016) |
Part of a series on the |
History of China |
---|
The history of Chinese currency spans more than 3000 years. Currency of some type has been used in
Around 210 BC, the first
Currently, the
Ancient currencies
The use of
were common enough to presume that they were used in trade.The Chinese may have invented the first metal coins, coins found in
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 (魏), the Han (韓) and the Qin (秦) all used coins shaped like a spade (bu). The Qi (齊) used money in the shape of a knife (dao). The Zhao (趙) and the Yan (燕) used knife money before switching over to spade money roughly halfway through the Warring States period. The Chu (楚) used money in the forms of "ant nose" coins (yibi).
Unification
As part of the Unification of China,
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
Yuan
The Mongol-founded
Ming
The early
Qing
In 1889, the
The earliest issues were silver coins produced at the Kwangtung mint in denominations of 5 fen, 1, 2 and 5 jiao and 1 yuan. Other regional mints were opened in the 1890s producing similar coins. Copper coins in denominations of 1, 2, 5, 10 and 20 wen were also issued. The central government began issuing its own coins in the yuan currency system in 1903. Banknotes were issued in yuan denominations from the 1890s by several local and private banks, along with the "Imperial Bank of China" and the "Hu Pu Bank" (later the "Ta-Ch'ing Government Bank"), established by the imperial government.
Republic of China
Silver coins
The
During most the Nanjing decade, China's currency was on the silver standard.[7]: 207 It was necessary for the Nationalist government's expenses to be balanced by sales of government bonds, tax revenues, and other receipts.[7]: 207
The 1920s and 1930s saw the price of silver appreciate in the international market, increasing the purchasing power of the Chinese currency and leading to a massive efflux of silver out of China. It became evident to the Chinese government that it could not retain the
Fabi
In 1935, the
No separate institution existed to control the money supply, and therefore the political leadership of the Nationalist government was free to dictate the money supply.[7]: 10 When it came to military expenses, Chiang Kai-shek decided how much money he needed and ordered H.H. Kung to supply it.[7]: 207
The onset of World War II saw a sharp devaluation of the fabi currency. This was largely due to the unrestrained issuance of the currency to fund the war effort.
The Nationalist government sought to ensure that the fabi remained convertible into foreign currency and expended large amounts of foreign exchange in an effort to maintain the pre-war exchange rate.[7]: 12 This approach became unviable and on March 13, 1938, the Nationalist government imposed strict foreign exchange controls.[7]: 12 Foreign banks operating in China could evade most of these controls, however, and continued to move money out of the country.[7]: 12
By October 1938, the Nationalist government lost control of its economic center to the invading Japanese.[7]: 6 Military expenditures remained high, but tax revenues plunged.[7]: 6 Printing of the fabi sought to cover the difference.[7]: 6
After its 1941 declaration of war against the United States and the United Kingdom, Japan moved into the foreign-controlled areas of Shanghai that it had not previously occupied after its success in the Battle of Shanghai.[7]: 12 It seized most of the banks in these areas of Shanghai and declared that fabi within Shanghai and occupied Tianjin had to be exchanged for bank notes of the Wang Jingwei regime.[7]: 15 For most Chinese in these occupied areas, the exchange meant that their fabi lost half its value and a major blow to the economy of the lower Yangzi resulted.[7]: 15
Customs gold units
Customs gold units (關金圓,
The peg was removed in 1935 and the bank allowed CGUs to be released for general use. Already awash with excessive paper currency, the CGUs only added to rampant hyperinflation.
1945–1948
After the defeat of Japan in 1945, the
Gold yuan
In response to hyperinflation, the Nationalist government issued the gold yuan in August 1948.[7]: 8 The Gold Yuan Certificate replaced the fabi at the rate of 1 gold yuan = 3 million yuan fabi = US$0.25. The gold yuan was nominally set at 222.17 milligrams (1⁄140 ozt) of gold. Despite the implication of "gold" yuan, the currency was not backed by gold.[7]: 173
The gold yuan failed with greater speed than the fabi had.[7]: 8 The gold yuan regulations had required citizens to surrender their gold and silver.[7]: 187 When these regulations were abandoned, people who had complied with the regulations suffered huge losses while those who had violated the regulations and hoarded gold and silver avoided this harm.[7]: 187 As hyperinflation continued after the gold yuan's failure, Chinese increasingly avoided currency and increasingly exchanged goods via barter.[7]: 187
1949–2001
Finally, in 1949, the
This currency was short-lived, as the Chinese Communist Party soon gained control of the Mainland provinces. It was replaced by currency issued by the People's Bank of China which was less prone to inflation.
After the retreat of the Kuomintang to Taiwan, the silver yuan remained the de jure legal currency of account of the Republic of China, although only Taiwan dollars issued by the Bank of Taiwan were circulating in areas controlled by the ROC. After a currency reform in 1949 created the New Taiwan dollar, the statutory exchange rate was set at 1 silver yuan = NT$3.
An amendment was passed in 2000 to make the New Taiwan dollar the official legal currency of the Republic of China.
Taiwan dollar
The Bank of Taiwan was originally established by the Japanese in 1899 whilst Taiwan was under Japanese administration. The bank issued Taiwanese yen which were pegged to the Japanese yen. After the retrocession of Taiwan to the Republic of China, the new Bank of Taiwan was allowed to continue issuing its own currency. Called the "Taiwan dollar", it replaced the Taiwanese yen at par. This was an attempt by the Kuomintang to prevent the hyperinflation affecting the mainland from affecting Taiwan.
However, mismanagement by the governor-general Chen Yi meant that the Taiwan dollar also suffered depreciation. It was replaced by the New Taiwan dollar in 1949 at the rate of 40,000 to 1.
Japanese occupation money
The Japanese Imperial Government issued currency through several means during their occupation of China.
Manchuria
At the time of invasion of China's northeast in 1931, multiple currencies were circulating. These included local provincial issues, the
After the puppet state of
Inner Mongolia
Before Japanese occupation, the predominant bank of China's northern provinces (including Suiyuan, Chahar and Shanxi) was the Charhar Commercial Bank. When the Japanese invaded, the bank evacuated the area taking all of its capital and all unissued currency. The Japanese military government quickly established the Channan Commercial Bank to replace its note issuing functions.
With the formation of Mengjiang puppet state, the authorities established the Bank of Mengjiang which amalgamated the Channan Commercial Bank with three other smaller regional banks. The Bank of Mengjiang issued Mengjiang yuan from 1937 which was pegged to the Japanese military yen and Japanese yen at par.
Collaborationist governments
The Japanese managed to establish two collaborationist regimes during their occupation in China. In the north, the "Provisional Government of China" (中華民國臨時政府) based in Beijing established the Federal Reserve Bank of China (中國聯合準備銀行, pinyin: Zhōngguó Liánhé Zhǔnbèi Yínháng). The FRB issued notes in 1938 at par with Kuomintang fabi. Although initially equivalent, the Japanese banned the use of Nationalist currency in 1939 and set arbitrary exchange rates in favour of the FRB yuan. The FRB yuan was replaced by Kuomintang fabi in 1945 at 5 FRB yuan = 1 fabi.
The
Japanese military yen
The
The currency became legal tender in China commencing in 1937. It was later replaced by issues from puppet banks. However, the currency remained in force in Hong Kong between 1941 and 1945. Initially set at HK$2 = JMY1, the Hong Kong dollar was largely preferred by locals and hoarded away. In order to address this, the Japanese government made possession of Hong Kong dollars illegal in 1943 and required a conversion to JMY at 4 to 1.
Following Japanese surrender
In the period immediately following the Japanese surrender in the Second Sino-Japanese War, the formerly occupied areas had competing currencies.[7]: 95 Japan had never unified the currency systems in the areas it occupied, thus the Wang Jingwei regime, the Wang Kemin regime, and the Manchukuo puppet state all had separate currency systems.[7]: 94–95 The Nationalist government attempted to replace these currencies with the fabi.[7]: 96 For the currency of the Wang Jingwei regime, the Nationalist government set a minimal exchange rate of 200 yuan in regime currency to one fabi and required the regime currency to be exchanged within four months.[7]: 96 This undervaluation made inflation worse as Chinese who formerly lived under the regime rushed to hoard goods rather than exchange for fabi which in turn drove price increases.[7]: 96 Ultimately, the unrealistic exchange rate impoverished those who had lived under the Wang Jingwei regime and made economic revival of the area more difficult.[7]: 96 The Nationalist government set more realistic exchange rates for the Wang Kemin and Manchukuo regime currencies.[7]: 97
People's Republic of China
Renminbi
The Chinese Communist Party gained control of large areas of the northeast of China during 1948 and 1949. Although several regional banks were established, they were united in December 1948 as the People's Bank of China. Established in Shijiazhuang, the new bank took over currency issuance in areas controlled by the Communist Party.
After the promulgation of the
Renminbi notes were issued in 12 denominations: 1, 5, 10, 20, 50, 100, 200, 500, 1000, 5000, 10,000, and 50,000 yuan. These denominations were subdivided into 62 styles. After adjusting the currency value with ratio 1:10,000 in March 1955, the second edition of Renminbi were issued in 12 denominations, including 1 fen, 2 fen, 5 fen, 1 jiao, 2 jiao, 5 jiao, 1 yuan, 2 yuan, 3 yuan, 5 yuan and 10 yuan.
The People's Republic of China began issuing aluminum coins in December 1957, in denominations of 1, 2 and 5 fen. From 1961, China outsourced the printing of 3, 5 and 10 yuan notes to the Soviet Union.
The fifth and latest editions of the currency of the People's Republic of China have been produced since 1 October 1999. Notes have been produced in 8 denominations: old types of 1 fen, 2 fen and 5 fen, as well as new issues depicting Mao Zedong: 5 yuan, 10 yuan, 20 yuan, 50 yuan and 100 yuan. In 2004, a 1 yuan note depicting Mao Zedong first came into production. Since 1999, coins have been produced in denominations of 1 fen, 2 fen, 5 fen, 1 jiao, 5 jiao and 1 yuan.
Foreign Exchange Certificates
The Bank of China on the Mainland was chartered as the main foreign trade and exchange bank. Foreign visitors to the People's Republic of China were required to conduct transactions with Foreign Exchange Certificates issued by the Bank of China between 1979 and 1994. These have been abolished, and all transactions now occur in Renminbi.
Transition from cash to mobile payment
Before 2010, consumer purchases with anything other than physical currency was rare, although in the 2000s some large urban shops and international hotels began to accept credit cards.[8]: 145 China leapfrogged credit card payments to become one of the world's leaders in mobile payments.[9]: 130 Early and wide adoption of mobile payments also led to a boom in online shopping and retail banking.[9]: 130
See also
References
Citations
- ^ "河南省人民政府門戶網站 中國最早金屬鑄幣 商代晚期鑄造銅貝". big5.henan.gov.cn. Archived from the original on March 17, 2012. Retrieved June 22, 2015.
- ]
- ^ YK Kwan. "History of China". Chinese Chinese. Archived from the original on May 3, 2012. Retrieved May 21, 2012.
- ^ "Shell Money before Qin Dynasty". Travel China Guide. August 8, 2022. Archived from the original on December 4, 2010.
- ^ "Shang Dynasty – V Economy". MSN Encarta. Archived from the original on October 21, 2009.
- ^ miaozc (August 20, 2015). "JiaoZi and Iron Standard – Examining world's first documented paper money system from China with lenses of Austrian economics". Rothbardian Gold Price. Archived from the original on August 29, 2015. Retrieved August 25, 2015.
- ^ ISBN 978-1-009-29761-5.
- ISBN 978-1-350-26724-4.
- ^ ISBN 978-1-03-239508-1.
Sources
English | Chinese ( Hanzi )
|
---|---|
Dai Jianbing (1993). Modern Chinese Paper Money. China Financial Publishing House, Beijing. | 戴建兵:《中国近代纸币》,中国金融出版社1993年版。 OCLC 30513635
|
Dai Jianbing (1994). Modern Chinese Commercial Bank Paper Money. China Financial Publishing House, Beijing. | 戴建兵:《中國近代商業銀行纸币》,中国金融出版社1994年版。 |
- Hartill, David. CAST CHINESE COINS. Trafford Publishing 2005.ISBN 978-1-4120-5466-9
- Chang, H.: The Silver Dollars and Taels of China. Hong Kong, 1981 (158 pp. illus.). Including Subsidiary Notes on “The Silver Dollars and Taels of China” Hong Kong, 1982 (40 pp. illus.). OCLC 863439444
- Cribb, Joe: A Catalogue of Sycee in the British Museum. Chinese Silver Currency Ingots c. 1750 – 1933. British Museum Press, London, 1992. ISBN 978-0-7141-0873-5
- Dong Wenchao: An Overview of China's Gold & Silver Coins of Past Ages – the Gold and Silver Coins and Medals of Modern China. Beijing 1992, ISBN 9625310010
- Kann, Edward: Illustrated Catalog of Chinese Coins. Second edition. Mint Productions, Inc., New York, 1966 (476 pp. and 224 plates). OCLC 156791313
- Lu, W.H. (editor): Paper Money Catalogue of the People's Republic of China (1948–1998). Paper Money Catalogue of Macau (1907–1998). International Stamp and Coin Sdn. Bhd., Kuala Lumpur, n.d. (50 plus 32 pp., colour illus.). OCLC 730565006
- OCLC 835075813
- OCLC 46717493
- Shanghai Museum: Chinese Numismatic Gallery. Shanghai, n.d. (1990s). In Chinese and English (44pp., colour illus.)
- Smith, Ward D.; Matravers, Brian (1970). Chinese banknotes. Menlo Park, California: Shirjieh Publishers. OCLC 475185214.
- Ting Fu-Pao: A Catalog of Ancient Chinese Coins (Including Japan, Forra & Annan). Taipei, n.d. (no pagination, illus.).
- White, Byron R. and White, Marjorie: A Comprehensive Finding List of Chinese Cash 618 AD to 1912 AD. Together with Lochhart's Listing of the Chinese Dynasties. Bai Publications, USA, n.p., 1976. (no pagination). OCLC 640066788