Expertly navigating primary sources in multiple languages and across three millennia, Niv Horesh explores the trajectory of Chinese currency from the birth of coinage to the current global financial crisis. His narrative highlights the way that Chinese money developed in relation to the currencies of other countries, paying special attention to the origins of paper money; the relationship between the West's ascendancy and its mineral riches; the linkages between pre-modern finance and political economy; and looking ahead to the possible globalization of the RMB, the currency of the People's Republic of China. This analysis casts new light on the legacy of China's financial system both retrospectively and at present—when China's global influence looms large.
Expertly navigating primary sources in multiple languages and across three millennia, Niv Horesh explores the trajectory of Chinese currency from the birth of coinage to the current global financial crisis. His narrative highlights the way that Chinese money developed in relation to the currencies of other countries, paying special attention to the origins of paper money; the relationship between the West's ascendancy and its mineral riches; the linkages between pre-modern finance and political economy; and looking ahead to the possible globalization of the RMB, the currency of the People's Republic of China. This analysis casts new light on the legacy of China's financial system both retrospectively and at present—when China's global influence looms large.
Chinese Money in Global Context: Historic Junctures Between 600 BCE and 2012
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Chinese Money in Global Context: Historic Junctures Between 600 BCE and 2012
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Overview
Expertly navigating primary sources in multiple languages and across three millennia, Niv Horesh explores the trajectory of Chinese currency from the birth of coinage to the current global financial crisis. His narrative highlights the way that Chinese money developed in relation to the currencies of other countries, paying special attention to the origins of paper money; the relationship between the West's ascendancy and its mineral riches; the linkages between pre-modern finance and political economy; and looking ahead to the possible globalization of the RMB, the currency of the People's Republic of China. This analysis casts new light on the legacy of China's financial system both retrospectively and at present—when China's global influence looms large.
Product Details
| ISBN-13: | 9780804787192 |
|---|---|
| Publisher: | Stanford University Press |
| Publication date: | 12/18/2013 |
| Pages: | 384 |
| Product dimensions: | 6.20(w) x 9.00(h) x 1.10(d) |
About the Author
Read an Excerpt
Chinese Money in Global Context
Historic Junctures Between 600 BCE and 2012
By Niv Horesh
Stanford University Press
Copyright © 2014 Board of Trustees of the Leland Stanford Junior UniversityAll rights reserved.
ISBN: 978-0-8047-8719-2
CHAPTER 1
A Common Origin for Coinage?
* * *
Popular literature often depicts a vigorous thrust of globalization that has "flattened" the world economy ever since the fall of the Berlin Wall in 1989. In the realm of scholarship, the present thrust of globalization is compared on occasions with the previous and much longer thrust of globalization, which had arguably started with the discovery of the New World and ended with the parceling up of the global economy into three separate economic blocs following World War II. Studies of the current and previous thrusts of globalization mostly discuss changing trade volumes and standards of living, yet some attention to the changing media of currency in antiquity is also at issue. Although groundbreaking studies have recently discussed how the Mongol use of paper money and, later, the discovery of rich silver deposits in Mexico and Peru brought about a sweeping overhaul of the monetary order across Eurasia from the thirteenth century onward and how this helped shape Eurasian trade in the era of High Imperialism and the edifice of modern nation-statehood, much less interdisciplinary attention has been paid to the transmission of currency across Eurasia before the Common Era.
The purpose of this chapter is, therefore, to examine the precursors of monetary globalization as far as the conceptualization and standardization of currency are concerned. The following passages survey the transmission of currency design and production technology across Eurasia in antiquity. In addition, they cast a sidelight on the present ("postmodern") and previous ("early modern") thrusts of globalization through a discussion of the premodern universalization of round coinage.
Postmodern interpretations of globalization often ascribe a minor role to the mastery of mineral wealth or the production of means of payment. In their influential books Hobson and Frank suggested, for example, that the mass flow of silver from Latin America to China in the early modern era was not a marker of Chinese economic passivity but rather a testament to the "magnetic" qualities and the inherently more advanced nature of the Chinese economy. A hundred years ago, European views of the Chinese early modern economy were of course much dimmer if not bluntly "Orientalist." Thus, if Hobson's aforementioned book is titled The Eastern Origins of Western Civilization (2004), Terrien Lacouperie's is provocatively titled Western Origin of the Early Chinese Civilization (1894).
Lacouperie's typical nineteenth-century bias should not detain us here. Of more relevance was his suggestion, based on apocryphal sources, that the premodern Chinese currency system had in fact been directly modeled on earlier Hellenistic coinage. Furthermore, he claimed that the Western Han (206 BCE–6 CE) monopoly of coinage production had in fact derived from Greco-Roman governance patterns, even though later on the production of coinage ended up much less centralized in medieval Europe than in, for example, Tang China (618–907 CE).
This chapter will therefore aim at taking a fresh integrative look at the origins and standardization of Chinese round coinage from a global perspective. It will show in passing that the various theories arguing for an exclusively endogenous impetus behind the spread and development of Chinese round coinage vouched for by many scholars in either East Asia or the West all carry inherent contradictions. In contrast, circumstantial and archaeological evidence in support of partly exogenous origins seem to be mounting. Evidence from the Middle East points to the early invention and wide circulation of round coinage in Lydia, Greece, and the Achaemenid Empire. The expansion of the Persians into India in the sixth century BCE and the later incursions by Alexander and the Greco-Bactrians in the fourth and third centuries BCE may have all facilitated or, indeed, decisively contributed to India's adoption of round coinage. Similarly, the flow of ideas, artistic motifs, and metallurgic know-how from West Asia to China via Central Asia had occurred much earlier than the third century BCE. Active adoption of foreign (Central Eurasian steppe) customs in the fourth century BCE is recorded in Chinese preimperial records and confirmed by recent archaeological findings across Eurasia.
In essence, therefore, this chapter questions the endogeneity of Chinese premodern round coinage with Lacouperie's improbable claim serving as a point of entry. The remaining sections are framed with a view toward testing argument and counterarguments to that effect. The second section will briefly chart the key characteristics of China's Bronze Age and the transition to iron casting there; the third section critiques prevailing views of the origins of Chinese round coinage among leading scholars in the People's Republic of China (PRC); short of providing an exhaustive numismatic survey, the fourth section aims to place the Chinese monetary experience in antiquity in broader Eurasian perspective; the fifth section presents later but equally pertinent numismatic evidence from the Silk Road. Finally, the Conclusions section will reassess the spread of round coinage across Eurasia in antiquity in light of the evidence presented here.
CHINA'S BRONZE AGE
Archaeological evidence suggests that the Bronze Age began in China's north and northwest regions no later than 2500 BCE, even though the south generally had more abundant copper deposits. It is generally acknowledged that Mesopotamia and Anatolia had developed a distinct bronze material culture at least five centuries earlier, yet most archaeologists would also agree that the level of sophistication in bronze vessel production reached during China's Shang dynasty (1600–1046 BCE) was unparalleled in the ancient world.
Bronze coin casting began in China in earnest during the late Spring and Autumn period (722–481 BCE). Copper had previously been alloyed to produce bronze weaponry and sacrificial vessels, which proved far superior to their stone equivalents in sharpness, durability, and gleam.
Much of the preimperial paraphernalia of Chinese currency retained the idiosyncrasies of that era. The famous spadelike (bubi) or knifelike (daobi) bronze coin designs were, for example, a Spring and Autumn refinement of the stone axes that had served as a medium of exchange in Neolithic times. In turn, the complex version of the ideograph denoting "quality" or "value" (zhi) in modern Chinese still conveys the exchange of two stone axes for one piece of cowrie, a much rarer item that was first introduced into the Yellow River basin as an exotic decoration from the tropical south. Arguably, cowrie morphed into a sumptuary medium of exchange in its own right sometime between the late Shang and early Zhou Dynasties (1100–256 BCE). Gold had been recognized as a precious metal back in the Shang era and could have hypothetically contributed to the gradual diminution in coin size. Yet it was too scarce in North China to become an inherent component of China's imperial monetary system.
The introduction of cast-iron weaponry, as from the mid-Spring and Autumn periods on, meant that sufficient amounts of copper could be freed up to serve as medium of exchange, thereby relegating most of China's nonmetallic protocurrencies—cowrie, silk, and animal hide—to the sidelines of mercantile activity. At the same time, most early designs of bronze money in north China continued to simulate tools that had initially been made of bronze (like spades or knives), possibly because these could be recast into useful articles and draw value from that utility. In parts of south China like the kingdom of Chu, however, currency in the form of flat golden plates (yingyuan), miniatures of cowrie (known as "ant-nose money" or yibi qian) made mostly of bronze, and spade-shaped currency made of silver had been concurrent until the Qin unification.
During the Warring States era (403–221 BCE), practical considerations led to the gradual attenuation of tool-shaped designs—generally designated by numismatists as "shovel-like" (chanxing) coins—into easier-to-carry, hollow designs such as that of the "level-head" (ping-shoubu) currency or the flatter "pointed-feet" (jianzubu) currency. In the early imperial Qin (221–206 BCE) and subsequent Western Han dynastic reigns (206–8 BCE), this type of currency had gradually made way for the introduction of the flat, round alloy coins (yuanqian), which were appreciably lighter than most Warring State copper currencies and ultimately became the hallmark of Chinese coinage for almost two millennia thereafter.
The convergence on round coinage across Eurasia roughly at that point in time suggests a degree of influence by Greco-Bactrian designs over Indian ones. It might also suggest that earlier contact with Greek coinage may have had something to do with the emergence of yuanqian, although this is much harder to prove. China's imperial age is conventionally thought to have begun with the unification of the "Middle Kingdom" by the notoriously ruthless First Emperor of Qin in 221 BCE. Traditionally, China's history is perceived from then on as a long sequence of dynastic reigns punctuated by bouts of chaotic disunion. Dynastic patriarchs are often framed in popular literature as ushering order into a disorderly world, while the last rulers in each dynasty are presented as degenerates who plunged all under heaven into chaos.
Within this narrative, political union and disunion have each assumed an auxiliary swag of similes. The dissemination of round banliang coins with square holes by the First Emperor of Qin, as part of an all-embracing standardization campaign, came to serve as one of the most evocative symbols of a strong unified China and as a benchmark for much of the Confucian discourse on monetary policy in subsequent dynasties. In reality, of course, the standardization of round coinage took much longer: Following the sudden collapse of the Qin, during the early Western-Han reign, "private coinage" was permitted; gold and silver ingots were readily exchanged, and the weight of the banliang was drastically reduced. Even Emperor Wudi (r. 141-87 BCE), who restored the state monopoly on coinage, tried at first to introduce "new" types of money—including ones made of silver alloy and the notoriously inflationary deer-hide currency (lupibi)—before embracing in 118 BCE a round variant of the banliang. Then, during usurper Wang Mang's brief reign (9–23 CE), there had also been famous attempts to reinstitute noncircular and nonmetallic currency alongside yuanqian; the hoarding of cowrie in elaborate bronze vessels as a symbol of wealth and status otherwise even survived a few decades thereafter.
But the early banliang design is nevertheless traditionally deemed to have entrenched the design of Chinese imperial coinage for almost two millennia afterward, perhaps because nonround forms of base-metal money seemed to have disappeared by the end of the first century CE, and the monetary use of silver and gold greatly diminished for several centuries thereafter. Concomitantly, the imperial regulation of copper mines and a monopoly of hearths had, from then on, become the most salient feature of China's monetary system in the premodern era.
HOW DISTINCT WAS CHÍNESE PREMODERN METALLIC CURRENCY?
However implausible the notion of a single West Asian origin of round metallic currency in the world must seem at first glance, it must not be rejected straightaway. This is not least because today's scholars need to know more about earlier thrusts of "globalization" to contextualize the present one. In Chinese academia, at any rate, the discourse on the precursors of globalization is still in its infancy, and the premise that China's ancient metallic currency is distinct goes almost without saying. That preimperial coinage is perceived as distinctly "Chinese" in design is perhaps best attested to by the fact Spring- and Autumn-era (722–479 BCE) spade-shaped coins, which had preceded round bronze coinage, were chosen to make up the People's Bank logo.
To be sure, knife- or axe-shaped currencies were recorded at different periods elsewhere. In some parts of Africa, sickle axes, axes, and knives were used as currency even after the onset of the continent's first indigenous round coinage, the Ethiopian gold aksum coin (200 CE). Earlier on, in Pharaonic Egypt bronze-ring armlets strung on metal loops had served as protocurrency long before China adopted the stringing of round bronze coinage. Even in the early modern era, when round coinage had already become universally entrenched, other designs could resurface in certain currency circuits: One is reminded for example of the extensive circulation of Southeast Asian cowrie in Yunnan in the early Ming era. Another example might be the appearance of the "fishhook" gold larin coins of the Persian Gulf in the seventeenth century, whereas most other Islamic coins were round.
Short of piecing together an exhaustive survey of global countercurrents in numismatics, what should perhaps concern us at this stage is why and how the shape of Chinese currency became round at much the same time as other parts of Eurasia were adopting round coinage, that is, the third century BCE. Is this design convergence across Eurasia simply a coincidence? Design convergence might conceivably reflect, in the first instance, a technological convergence emanating from the advantages of casting round coinage over more complex shapes of metallic money in terms of molding or wear and tear. Other explanations for the extensive spread of round design across Eurasia within a relatively short space of time might bring to mind metahistoric, cultural, or ecological factors. But the present chapter does not concern the complex economies of technology or transmission of production know-how as much as it is an attempt to underscore the plausibility of design diffusion and similarities in the conceptualization of currency. In that sense, it goes against much of the conventional wisdom both in the West and in East Asia postulating that two inexorably separate monetary traditions had existed across Eurasia before the universalization of steam-powered mints in the mid-nineteenth century.
Granted, minting technology never quite carried over from West Asia to East Asia prior to the nineteenth century, and in that sense a modicum of separateness can be argued for; Chinese round coins traditionally were cast from molten bronze while western Eurasian round coin production involved, in the main, striking a die on a solid metal flan. Neither could extant Chinese sources, archaeological findings, or our present knowledge of the scope of intercivilizational contact before the common era allow for an exhaustive delineation of the conditions in which Chinese craftspeople might have attempted to (re)produce round coinage. Yet the archaeological, epigraphic, and circumstantial evidence presented in the following discussion would clearly suggest that a form of "stimulus diffusion" of round-coinage design could have transpired across Eurasia. In other words, there seems to be a strong case that during the mid-fourth century Chinese craftspeople—having encountered foreign precious-metal round coinage or having heard about it from their superiors—attempted to produce round coinage for the first time, while relying on preexisting metallurgical know-how and while maintaining a preference for bronze.
It is otherwise often alleged that the "separateness" of premodern Chinese coinage derived from its being made out of copper or bronze, while European coinage was usually made of silver or gold. This seems, however, an overstatement from today's vantage point: To begin with, large quantities of imperial Chinese round coinage were at times made of iron, although bronze always remained the mainstay; there have even been found rare specimens of ancient spade-shaped coinage made out of silver, quite apart from the aforementioned gold-plate coinage that was current in the southern state of Chu during the preimperial era. But, perhaps more important, recent studies have shown that cast bronze coinage was at times also an important part of the European premodern money system alongside silver and gold: Such for example was the famous Roman aes coinage. And after about 1300 CE, copper again played an important role both as means of adulterating (read: debasing) European precious metal coinage or as token money in its own right, as will be explained in Chapter Three.
Similarly, if Aristophanes' (427–386 BCE) The Frogs contains the most ancient of recorded Western diatribes against the scourges of debasement, then nobleman Shan Qi's exhortations in China—although different in approach and tenor perhaps—are equally revealing. Aristophanes famously decried the replacing of full-bodied Athenian gold coins with poor-quality copper alloys of the same nominal value, probably in the context of fiscal exigencies arising from the Peloponnesian Wars (431–404 BCE). Contained as a passage in the ancient classic Discourse of the States (Guoyu), Shan Qi warned King Jing of the Zhou Dynasty (r. 544–520 BCE) not to abolish all existing variants of knife-shaped bronze coinage in favor of new bigger and heavier bronze coinage that was probably intended to pass at a much higher nominal value than its weight would warrant. Instead, Shan Qi suggested that a duality of both light and heavy coinage should obtain in the marketplace; he further recommended that the supply of either type of coinage should be adjusted by the king from time to time, so as to shore up prices and facilitate market transactions.
(Continues...)
Excerpted from Chinese Money in Global Context by Niv Horesh. Copyright © 2014 Board of Trustees of the Leland Stanford Junior University. Excerpted by permission of Stanford University Press.
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Table of Contents
Tables and Figures ix
Acknowledgments xi
Introduction 1
Part I
1 A Common Origin for Coinage? 19
2 From Coinage to Paper Money: The Origins and Evolution of Chinese and Western Banknotes in Comparison 41
3 The Great Money Divergence: European and Chinese Coinage before the Age of Steam 83
Part II
4 Paper Money in Qing China: Exactly How Common and Reliable Was It by the Early Twentieth Century? 121
5 British Banknote Issuance in China: Cross-Imperial Connections 148
6 Japanese Colonial Banking and Monetary Reform: China, Korea, and Taiwan, 1879-1937 183
7 Will the Renminbi Go Global? 210
Conclusions 239
Notes 251
Bibliography 293
Glossary 339
Index 343