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  1. 1. History Of Money in ChinaThe Department of Chinese Culture Tsinghua University, Beijing, China On the A brief introduction to History of MONEY In CHINA December 25th 2012 By Tayyab Farooq (阿里) Student ID: 20122801581|Page
  2. 2. History Of Money in China History of Money in ChinaMoney is basically an agreement between people. Money is any clearly identifiableobject of value that is generally accepted as payment for goods and services andrepayment of debts within a market or which is legal tender within a country. It is anagreement that this much of some kind of metal (usually gold, silver, or bronze) orpaper will be worth this much bread, and this much cheese.The earliest metal coins came from China, where people used small pieces of bronze totrade things starting around 1500 BC.Coins with guarantees were invented around 650 BC. This kind of coin is marked witha promise by somebody (often a government) that this coin is worth what it says it isworth. So you dont have to weigh each coin before you accept it (if you trust thatgovernment). The first coins of this kind were from Lydia, in West Asia. They wereused to pay mercenary soldiers. But many people preferred to keep on trading one thingfor another (bartering) insteadThe Emergence of Money:-Anatolian obsidian as a raw material for stone-age tools was distributed as early as12,000 B.C., with organized trade occurring in the 9th millennium. In Sardinia, one ofthe four main sites for sourcing the material deposits of obsidian within theMediterranean, trade in this was replaced in the 3rd millennium by trade in copper andsilver.Both grain and cattle as money are known in use 9000 BC as two of the earliest thingsunderstood as available to barter (the first grain remains found, considered to beevidence of pre-agricultural practice date to 17,000 BC). The importance of grain tovalue and money is true whereby in language there is, surviving the transition of thematerial of currency, the description of gold in a smaller state described as a "grain ofgold".In the ancient earlier instances of trade with something as money, the things with themost desirable; useful and their reliability in terms of the confidence a person wouldhave had in the re-use and re-trading of these things (their marketability), decided in theminds of the prospective individuals concerned the nature of the object or thing chosento exchange. So as in agricultural societies, all those things needed for efficient and2|Page
  3. 3. History Of Money in Chinacomfortable employment of energies for the production of cereals and the like were themost easy to transfer to monetary significance, for direct exchange. As more of thebasic conditions of the human existence were met to the satisfaction of human needs, sothe division of labor increased to create new activities for the use of time to solve moreadvanced concerns. As people’s needs became more refined, so indirect exchangebecomes more likely as the physical separation of skilled laborers (suppliers) from theirprospective clients (demand) required the use of a medium common to all communities,to facilitate a wider market.Aristotles opinion of the creation of money as a new thing in society is:“When the inhabitants of one country became more dependent on those of another, andthey imported what they needed, and exported what they had too much of, moneynecessarily came into use.Money in CHINAThe first objects to be used as money by the people of China were NATURALSEASHELLS. This marked the beginning of a transition from the old systemwhereby goods were traded and bartered to a new age of monetary symbols. Thencame the Bronze Age, during which the Chinese used their skills and wisdom tocreate a resplendent bronze culture. Bronze coins replaced shells as the currency ofthe age, and were supplemented by the circulation of precious metals such as gold andsilver. With the emergence, growth and increase of marketplace trading, all kinds ofmoney appeared and went into broad circulation. Following the historicaldevelopments of modern civilization, they gradually developed into the perfectlyintegrated credit and currency systems in place today. The history of money in Chinagoes back more than 4000 years, and the types of money that have been used aremany and varied, including ancient forms of money, gold and silver currency, coppercoins, and paper money. The emergence of money gave people more freedom ofmovement and association. During every historical period or phase, the differentmaterials and methods used in coining reflected not only political strength, but alsothe state of the economy and the level of technological development. Money hasalways been closely linked to the development of society. The changes andreplacements of currencies tell a vivid story of the vicissitudes of nations, the rise andfall of dynasties, but also amply reflect the skill and imagination of the coiners whohave made money into a rich, unique and exquisite art form. We sincerely hope thatvisitors to this exhibition will be able to further their knowledge and understanding of3|Page
  4. 4. History Of Money in ChinaChinese history and culture through an appreciation of the long history of Chinesemoney.How coins were made in ancient China the earliest coining method used by theancient Chinese was a very complex process. First a copper mother mould was cast,then clay was used to make layer upon layer of pottery child moulds. The mother andchild moulds were fitted together, and liquid bronze was poured in though a hole.When the coins had hardened the pottery moulds were smashed, and the bronze coinsremoved. Finally, the edges of the coins were filed and polished to make them smoothand round.By the Song Dynasty, the manufacture of money was already tending towards ahigher degree of effectiveness, and pottery moulds were being replaced by sandcasting. In this process, VISCID SAND was formed into two sand boards, andfinished mother coins placed between them. Pressure was exerted on the boards toform a series of obverse and reverse coin moulds, and molten bronze was then pouredin through an aperture. After the sand boards had been broken open and the coinsremoved, the fragments of sand could be reformed into new boards and used again,saving both working hours and raw materials.When sand-casting was used in coining, the grains of sand were first filtered througha SIEVE, to ensure that the granules were of even size. The mother coins were thenused to push out the coin shapes.Hawks beak clamps were used to squeeze shut the container before the moltenbronze was poured into the shaped coin moulds.Once the coins had been cast, they still needed to be smoothed and polished. Theunfinished coins were threaded onto a long stick, and their edges were rubbed smoothon top of a flat slab. Conclusion Tiny ancient coins attract so much attention from somany people because they permeate the historical events that have shaped the political,economic and cultural evolution process of every dynasty and period in Chinesehistory. This is what is meant by the phrase, The rise and fall of dynasties are all inmoney. While you are enjoying looking at Chinese money in all its different forms,shapes and sizes, you will at the same time gain a deeper understanding of Chinashistory and culture. Indeed, that is the purpose and intention of this exhibition: toexplain the development of Chinese history from its beginnings to the present daythrough the medium of money.4|Page
  5. 5. History Of Money in ChinaThe earliest money used by mankind:-Money, a product that possesses considerable MAGIC POWER, came into beingamid mankinds earliest exchange of goods. In China, 4000 years ago, naturalseashells were the first form of currency to be used. Seashells were chosen becausethey were easy to count, and also because they were difficult to come by in inlandtowns.Imitation shells and metal coins:-As goods began to be exchanged with increasing frequency, the supply of seashellsoften lagged behind the demand for them, and so imitation shell money began to bemanufactured from various materials including stone, jade, bone and copper. Oneexample of this was bronze shell money, the appearance of which marked thebeginning of metal coining. The abundance of coins created in this way greatlyaccelerated the development of commodities exchange, and gave a huge boost to thegrowth of commerce and even the formation of citiesThe place of shells in ancient China Among the thousands of characters that make upthe Chinese written language, the majority of characters that are related to wealthhave the lateral radical ‘bei’, meaning COWRIE SHELL. From this we can see thatwhen the Chinese written language was first taking shape, the cowrie shell wasalready a symbol representative of money and wealth.The four big currencies of pre-Qin China:-During the Spring and Autumn and Warring States periods (770 ~ 221 BC), as a resultof the rapid development of the commodity economy, several different kinds ofancient coins started to appear, their shapes based mostly on the tools or utensils thatwere used at the time. Among the different currency sets, the four big ones were:  Cloth coins (bu bi)  Knife coins (dao bi)  Inscribed bronze shells (daiming tongbei)  Round coins (huan qian).5|Page
  6. 6. History Of Money in China Fig: four big currencies of pre-Qin ChinaThese coins varied from different region to region and from city to city, and theyprovide evidence of traces left by the agricultural production of primitive societies,and of the earlier trade and barter systems used by mankind.The Qin Dynasty unification of currency systems:-The Qin Dynasty (221 ~ 207 BC) was the first feudal dynasty to unify China, and hasbecome famous throughout the world because of emperor Qin Shi Huang and theTerracotta Army discovered in his mausoleum. Not only did Qin Shi Huang unify theSix States, he also unified their written languages and currencies, bringing the BanLiang (half tael - 半兩) coins into use across the whole nation. These coins werecircular in shape with a square hole through the middle, a shape that expressed theancient Chinese belief that heaven was round and the earth was square. From then on,round coins with square holes continued to be used in China for more than twothousand years, until the late Qing Dynasty.6|Page
  7. 7. History Of Money in China Fig: Ban LiangVarious kinds of Qin Ban Liang coins:-Commercial activities flourished during the Han Dynasty (202 BC ~ 220 AD). In theearly stages civilians were permitted to mint their own coins, but this led tocounterfeit and inferior currency becoming a serious problem. Han Wu Di stands outin Chinese history as an emperor of many achievements, and it was during his reignthat this situation was remedied. In 113 BC his government established the worldsfirst national mint, Shanglin Sanguan (上林 三官), in the capital Changan (todaysXian), thus centralizing the minting of money. To stop people stealing bronze byfiling down the coins, the coins were cast with a raised edge, and this was the earliestmeasure taken to prevent counterfeit money in human history. Fig: Shanglin Sanguan (上林 三官)7|Page
  8. 8. History Of Money in ChinaCurrency inflation during the Xin Mang Period:-Currency inflation has been around since ancient times, although its causes weredifferent. For Example:  Coins could decrease in weight  Becoming so thin and small that they would float on water  They were easily broken when handlingDuring the Xin Mang Period (9 ~ 25 AD), a brief dynasty between the two HanDynasties, a large number of coins of nominal value were distributed, such as yi daoping wu qian-一刀平五千’ (one dao equal to five thousand), a coin that was equal invalue to five thousand small ping coins. This led directly to poverty and disadvantagein peoples lives, economic collapse and social upheaval, and further hastened thedemise of the dynasty. Fig: yi dao ping wu qian-一刀平五千How the Chinese made money 2000 years ago:-China was one of the earliest countries to start using bronze technology, and earlyChinese coins were also cast from bronze. Coins were cast from hard moulds, untilafter the Tang Dynasty (618 ~ 907 AD) when sand moulds began to be used. As sandmoulds were destroyed in the casting process, and could not be preserved, it is mostlyhard moulds that have survived and can be seen by us today. There were various typesof hard mould such as pottery, stone and copper, and the different coining methodsused included8|Page
  9. 9. History Of Money in China  Casting (mo)  Moulding (fan)  Single-layer vertical casting (dan ceng li shi jiao zhu xing)  Repeat casting (die zhu).The Chinese term mofan (model or mould) comes from this. The consequences ofupheaval in the country.The Three Kingdoms of Wei, Shu and Wu (220 ~ 266 AD) each did things in theirown way; as a result of this and of the unstable political situation of the succeedingWei, Jin and Northern and Southern Dynasties (281 ~ 589 AD), monetary policieswere uncoordinated between the different states and dynasties, to the point wheregoods such as grain and silk were being used as currency at the same time as coins.Upheaval in the country caused division between monetary systems, and the fact thatgrain and cloth were being used in place of money shows the regression caused bythese divisions.Devaluation of currency in the Sui Dynasty:-During the Sui Dynasty (589 ~ 681 AD), canals were constructed to solve the problemof transporting grain between north and south. The long-term benefits of thisundertaking were undeniable, but national finances could not bear the burden ofseveral massive engineering projects running simultaneously. The extravagance andcorruption of Sui Yang Di, a famously despotic emperor, resulted in inflation andcurrency devaluation.The origins of credit:-The Tang Dynasty saw Chinas feudal society at the height of its power and splendour,economically prosperous and culturally productive, with many great works of art andliterature brought into being. The influence of the Tang Dynasty on Chinese culturewas huge; even now, overseas Chinatowns are known as Streets of the Tang peoplein Chinese, and traditional Chinese dress is called Tang costume. Tang Dynastycoins, called Kaiyuan Tongbao-开元通宝, were no longer recorded in weight, andwere thus the earliest credit money in the world. The name Kaiyuan Tongbao meant,a new era has begun; coins are circulating treasure. We can see that the ancientChinese peoples ideas about money were already quite open.9|Page
  10. 10. History Of Money in China Fig: Kaiyuan Tongbao-开元通宝Deflation at the height of the Tang:-The early period of the Tang Dynasty, as far as the purchasing power of money wasconcerned, was a period of low prices. Prices were low mainly because it was apeaceful time during which production increased. In the 4th year of the Wude era(621 AD) the ‘Wuzhu-无助 coin’ was discontinued, and later other types of coinswere also withdrawn, leaving the Kaiyuan Tongbao as the principal currency incirculation. v Fig: Wuzhu-无助 coinThe Silk Road:-The Silk Road, like the fuse that sets off an explosion, ignited the worlds yearningsfor China. From its beginnings in the Western Han (202 ~ 9 BC) until its height in theTang Dynasty (618 ~ 907 AD), the Silk Roads history spanned more than a thousandyears. Setting out from Changan (todays Xian), the political and economic centreof the time, the route passed through many Central Asian countries on its way toEurope and Africa. As merchants travelled back and forth along the road, largequantities of Chinese money, as well as silk and other goods, passed between thevarious countries, while Western money and merchandise flowed into China.10 | P a g e
  11. 11. History Of Money in ChinaMoney and Calligraphic Art:-The beauty of symmetry, an important tenet of traditional Chinese aesthetics, is alsoreflected in money. The most typical example of this is the Duipin coins that werecommon during the Northern Song (960 ~ 1127 AD) that were inscribed withcharacters identical to the variant forms used in calligraphy. Coins were minted ingreat quantities during the Song Dynasty, but what is even more worth mentioning isthat Song Dynasty money was designed with a high degree of artistry, drawing onmany different styles of calligraphy and taking Chinese monetary culture to a newheight.The earliest year-marked coins in the world:-The ‘Chunxi Yuanbao - 淳熙元宝’coins produced during the Southern Song (1127~ 1276 AD) have the character seven in capital form on their reverse sides as arecord of the year, the 7th year of the Chunxi era (1180 AD). After that year, theordinary non-capitalized form was used for numerals. This system of year-markingcoins was used up until the end of the Song, and is an important characteristic of Songmoney. Chinese money started to be year-marked more than three hundred yearsbefore a similar practice was adopted for European coins. Fig: Chunxi Yuanbao - 淳熙元宝The emergence and significance of paper money:-The monetary systems of the two Song dynasties still relied mainly on coins, but by11 | P a g e
  12. 12. History Of Money in Chinathat time silver was greatly increasing in importance, and the production andpromotion of paper money was the most notable contribution to the monetary systemof that era. The paper money was a typical credit currency, printed using carvedwoodblocks and guaranteed by the state. The emergence and circulation of papermoney was the beginning of a new era in the history of money in China. It had a greatimpact on the development of society and economy, and a profound and lastinginfluence on the ages to come.Money of the Liao, Western Xia and Jin dynasties:-Existing concurrently with the Song were a few regimes established by minoritypeoples in the north, namely The Liao, Western Xia and Jin dynasties. In manyways they were considerably influenced by the Han nationality culture of the CentralPlains. They used Han characters on their money, and also adopted the Han monetarysystem and minting methods. Their governments followed the Han system, andtendencies towards assimilation could also be seen in education, clothing and socialcustoms.Yuan Dynasty currency:-The Yuan Dynasty (1271 ~ 1368 AD) was a feudal dynasty dominated by Mongoliannobles, established by Kublai Khan on the foundation of Genghis Khansunification of Mongolia. From its inception the Yuan Dynasty vigorously pushed theBaochao, a form of paper money that could not be freely converted. Paper moneytook over from copper coins as the basic currency in use, and gold and silver wereprohibited from circulation. From the Yuan Dynasty onwards, China switched to usingsilver as the measure of monetary value. Fig: Zhiyuan Tongxing Baochao- 之源通行宝钞12 | P a g e
  13. 13. History Of Money in ChinaZinc refining technology and brass money:-While the Ming Dynasty (1368 ~ 1644 AD) was in power, a mixture of paper money,copper coins and silver was used. By the time of the Jiajing era (1522 ~ 1566 AD),the technology for refining zinc was already well developed, and an evolutionarybreakthrough occurred in the minting of money. Chinese money had previously beenmade from bronze. In the Jiajing era, zinc started to be added to the bronze to producebrass, another alloy from which coins could be minted. From this we can see theinfluence of science and technology on money.The early Ming fails to prohibit the use of silver:-In the early years of the Ming Dynasty, the government prohibited the use of gold andsilver in order to promote the use of paper money within the monetary system, andeven imposed a Ban on the mining of silver. But this proved a difficult change tomake, as people had already been using silver as currency for several centuries, sincethe time of the Five Dynasties (907 ~ 960 AD), and its use was also influenced byCentral Asian currency systems. In the middle period of the Ming, Zheng Heundertook his voyage to the West, opening up a connection between China and theWest. Most of the Western countries that set up international trade relations withChina used money made of silver or other precious metals, and so the Minggovernment had to lift the ban on silver.Qing Dynasty money:-The Qing Dynasty (1644 ~ 1911 AD) was the last dynasty of the Chinese Empire. Bythe early Qing, China was already a vast empire with a territory more extensive than ithad commanded during the Han and Tang dynasties, and second only to the Yuandynasty. The Qing government was established and dominated by the Manchurianaristocracy. A process of absorption and assimilation occurred between the Manchuand Han cultures, evidenced by the money of that period on which Manchurian andChinese scripts appear side by side.A peak period for minting the emperors Kangxi (1662 ~ 1722 AD) and Qianlong(1736 ~ 1795 AD) were grandfather and grandson. Their long reigns were a time ofpeace and prosperity throughout the country, during which the people led relativelystable and affluent lives, and are known as The Golden Age Of Kangxi AndQianlong. While Kangxi and Qianlong were on the throne, coins were cast in a widerange of forms and in great quantities. It was an age that proved to be another peak13 | P a g e
  14. 14. History Of Money in Chinaperiod in the history of minting money in China.Draft Banks:-Draft banks (piaohao- 票号 ) came into being because of the need to transfer funds.In the early years of the Daoguang Emperor (1821 ~ 1850 AD), merchants fromShanxi Province were trading in Chongqing, Tianjin, Beijing and other places, andthey often experienced the difficulties and dangers of carrying cash on long journeys.To solve this problem, Lei Lutai, a native of Pingyao, Shanxi, converted theXiyucheng Pigment Shop (洗浴城颜料店) into the Rishengchang Draft Bank (日升昌票号), specializing in exchange and remittance of funds, thereby creating the firstdraft bank. Fig: piaohao- 票号The Qing under the shadow of war after going through two Opium Wars, the Qingdynasty lost strength and gradually went from prosperity to decline. On October 18th1860, the British-French Allied Forces burned down the Yuanming Yuan, the oldSummer Palace known as the Garden of Gardens, and forced the Manchu Qingrulers to sign the Treaty of Peking, to cede territory and pay indemnities. Thiscaused a drain on silver, and the copper coins that were minted were also ofincreasingly poor quality, causing severe currency devaluation.The declining empire:-In 1901, the Eight-Power Allied Forces made up of British, American, French,German, Japanese, Russian, Austrian and Italian forces invaded China, and modemChina was thenceforth reduced to a semi-colonial, semi-feudal society. Following thisdownturn in the national strength, the coins minted by the Qing deceased in weight asthe embarrassing situation grew gradually worse. A few regimes established by14 | P a g e
  15. 15. History Of Money in Chinapeasant rebellions also started to mint money autonomously, both for civilian use andto reinforce military supplies.The Westernization Movement and machine-made money:-Before the end of the Qing dynasty (1910), following the foreign invasion of China,the Westernization Movement began to advocate the use of advanced foreigntechnology to strengthen the country and bring wealth to the people. During the reignof the Qing Emperor Guangxu (1875 ~ 1908), the Governor-General of Guangdongand Guangxi provinces Zhang Zhidong introduced modern Western methods of coinminting that made use of advanced technology. He bought coining machines fromBritain, and established a mint in Guangzhou (Canton), taking the lead inmechanizing the minting process. The machine-made money produced was regular,uniform and of fine quality, similar to the money we use today.The crystallization of folk culture - Yan Sheng money:-Money that was specially made for the purpose of driving away evil spirits alreadyexisted in China over two thousand years ago. It was not circulated as currency, butwas made in lively and interesting designs, and people called it Yan Sheng money. Aswell as being officially minted by the government, it also came from all levels ofsociety. Yan Sheng money reflected many folk fashions and customs, as well as thelikes, dreams and beliefs of the broad masses of the people. It provides valuable datafor the study of folk customs.The influence of Chinese coining on Oriental monetaryculture:-The Oriental currency system refers to the group of currencies that can be representedby Chinese historical money, and includes the currencies of Korea, Japan, Vietnamand parts of South-East Asia. Prior to the Qing Dynasty, Chinas economy and culturehad long been a big influence on the East and South-East Asian region. The influencewas especially strong on the politics, economy and culture of Vietnam, Japan andKorea, and the currencies of those countries largely emulated Chinas methods ofcoinage. Merging with Chinas monetary culture, together they formed a uniqueOriental monetary culture system.15 | P a g e
  16. 16. History Of Money in ChinaMoney during the Republican ERA:-During the existence of the Republic of China (1912 ~ 1949), Chinas financialenterprises underwent an unprecedented shake-up as the forms of money went fromchaos to conformity. The age-old system of silver Taels (Liang) was abandoned, andSilver Dollars (Yuan) started to be used in their place. Silver dollars were in turnreplaced as legal tender by non-cashable banknotes, and gradually a currency systemevolved in which paper money was primary and coins secondary. Fig: Taels (Liang) Fig: Silver Dollars (Yuan)The emergence of banks In Tang Dynasty China a phenomenon known as flyingmoney (飞钱 - feiqian) appeared that was in fact a banking system in embryonic form,six or seven centuries earlier than Europes financial institutions. In the Song Dynastythere was public-private convenience exchange (guansi bianhuan -官司变换), and inthe Ming and Qing Dynasties the private banks (qianzhuang -钱庄) and draft banks(piaohao - 票号 ) emerged; these financial institutions were all bank-like in nature.The birth of Chinas modern banks came a full 50 years after banks for foreign capitalwere established in China. In 1897, the Qing government authorized the founding ofChinas first bank - THE IMPERIAL BANK OF CHINA - 中国通商银行(the namewas changed to ‘Commercial Bank of China’ in 1912) - which started issuingbanknotes the following year, marking the start of Chinas own banking system andbanknote issue. THE IMPERIAL BANK OF CHINA - 中国通商银行16 | P a g e
  17. 17. History Of Money in ChinaModern State Banks:-In 1905, the Qing government established the first state bank in Chinese history, theDa Qing Bank - 大 清 银 行 . Later they went on to found the Bank ofCommunications as well as some merchant banks and local banks. After theRevolution of 1911 broke out on October 10th 1911, the Da Qing Bank was renamedBank of China.The state banks of the National Government In 1927, the National Government wasestablished in Nanjing. In 1928 the Central Bank was proclaimed a state bank by thenew government and started operations. The Central Bank was of a different nature toother ordinary banks and state-owned enterprises, and doing business was not its mainpurpose. After its establishment the Central Bank steadily increased in strength anddeveloped very rapidly, laying an important foundation for the financial monopoly ofbureaucratic capital.Chinas banking industry in the early 20th century From the 1930s onwards, theChinese banking industry achieved an unprecedented rate of growth. 137 new bankswere established during that period despite, and although there was a financial crisisfrom 1934 to 1935, not only did the number of new banks not decrease during thoseyears, but banks also occupied a leading position, with local banks issuing awhirlwind of banknotes and encouraging business. It was the local banks inGuangdong, Shandong, Shanghai and other cities and provinces that developed at thefastest rate.Republican finance during wartime Because of the War of Resistance against Japan(1937 ~ 1945) and the civil war raging within China (1927 ~ 1949), the Kuomintanggovernments financial deficit rose sharply and the ‘Fabi -法币’ (paper money issuedfrom 1935) became unsustainable, a situation the Kuomintang sought to remedythrough Monetary Reforms. But prices continued to rise by the day, even by thehour, and soon whole bundles of banknotes were little more than waste paper - theywere even used by ordinary people to plaster their walls - setting a world record forthe highest currency inflation ever to occur in monetary history.First Version of Renminbi:-The first version of the ‘Renminbi – 人民币’ - the founding of the Peoples Republicof China on December 1st 1948, the ‘Peoples Bank of China’ was founded and17 | P a g e
  18. 18. History Of Money in Chinastarted to issue Renminbi. Because at that time the flames of war had still notsubsided, and it took time for the Renminbi to be introduced, no fractional currency ormetal coins were issued with the first version of the Renminbi. On October 10th 1949,‘Chairman Mao Zedong’ stood on the ‘Tiananmen Gate Tower’ and solemnlydeclared the founding of the Peoples Republic of China; this signified somemomentous changes for China. Fig: First Version of RenminbiThe second version of the Renminbi:-The pace of construction From March 1st 1955 the Peoples Bank of China issuednew currency (the second version of the Renminbi), and recalled the old (the firstversion). The conversion rate between the new and old currencies was such that ‘1yuan of the new currency was equal to 10,000 yuan of the old currency’.Design-wise, this version of the Renminbi was clear in its ideology: the fen notesshowed images of industry and transportation, while the jiao notes depicted themechanization of agriculture, the improvement of production and scenes ofconstruction, reflecting the new look of Chinas socialist construction.18 | P a g e
  19. 19. History Of Money in China Fig: The second version of the RenminbiCoupons:-Evidence of the change from planned economy to market economy In 1950s China,peoples material life and means of production were still very deficient, and in order tomanage the overall distribution of resources, in 1953 the Chinese government beganto practice planned supply throughout the whole country. Coupons then became asecond currency used by people in their daily lives. Early in 1992, following agradual improvement in quality of life and means of production, and a big increase inthe supply of material goods, the various coupons that had been in use for almost fortyyears finally left Chinas economic stage.The Third Version of the Renminbi:-The third version of the Renminbi is issued In order to boost the development ofindustry and agriculture, increase the circulation of commodities and facilitate thepeoples use of currency, on April 20th 1962 the Peoples Bank of China began toissue the third version of the Renminbi, with authorization from the State Department.The designs printed on this version focused on Chinas national economic policies ofthe time - which the economy should be based on agriculture, led by industry, with thesimultaneous development of agriculture, light industry and heavy industry.Long live the great unity of the Chinese people:-Long live the great unity of the Chinese people - 中国人民大团结万岁’ was thedraft title of Mao Zedongs speech for the Chinese Peoples Political ConsultativeConference on September 30th 1949. The designs on the new 10-yuan note of thethird version of the Renminbi illustrated this idea with images of Chinas variousnationalities and of workers, peasants and soldiers, which led to the notes beingnicknamed great unity by the masses. They symbolized Chinese people fromdifferent ethnic groups living and working together in peace, unity, stability andcontentment.Images of the people In China, workers, peasants, soldiers, intellectuals andtradesmen are the basic elements that constitute the working population. They formthe main body of the vast workforce, with workers and peasants accounting for thelargest percentage. The new Renminbi notes were printed with designs that showed19 | P a g e
  20. 20. History Of Money in ChinaChinas working people, as represented by workers and peasants.Ping-Pong diplomacy and Foreign Exchange Certificates the famed Ping-PongDiplomacy is a uniquely fascinating phenomenon in the history of internationalrelations. A little white ball bounced around the world, breaking the thick ice ofSino-American, Sino-Japanese and East-West relations, and turning a new page forthe PRCs foreign affairs. As Chinas foreign relations became increasingly frequent,on April 1st 1980, authorized by the State Department, the Bank of China began toissue the 1979 edition of ‘Foreign Exchange Certificates (FEC)’ in sevendenominations, and in 1990 issued two new 1988 edition certificates in differentdenominations. Foreign Exchange Certificates were issued as a special currency thatforeigners could use to purchase commodities in China. Fig: Foreign Exchange Certificates (FEC)The Fourth Version of the Renminbi:-The spirit of reform and opening up since the policy of reform and opening up,Chinas urban and rural commodity economy has developed rapidly, the retailturnover of social commodities has increased by a large extent, with a correspondingincrease in the demand for currency. From April 27th 1987 the Peoples Bank ofChina began to issue a new edition of the Renminbi. This, the fourth version, madedefinite innovations and breakthroughs in design, style and printing techniques.20 | P a g e
  21. 21. History Of Money in China Fig: The fourth version of RenminbiHong Kong and Macao On May 2nd 1994, Hong Kong dollars in five denominationswere issued for the first time by the Bank of China, and went into official circulationin Hong Kong. On October 16th 1995, the Bank of China Macao Branch issuedMacao dollar banknotes in five denominations. The new Hong Kong dollars andMacao dollars issued by the Bank of China were used together with the old HongKong dollars and Macao dollars that were already in use.21 | P a g e
  22. 22. History Of Money in China Fig: Hong Kong Dollar and CoinsThe Renminbi weathers Asias financial storm:-In 1997 a monetary crisis suddenly erupted in Thailand and developed into a financialand economic crisis; whats more, it quickly spread to other countries and regions ofEast and South-East Asia. In the midst of the Asian financial crisis, China maintainedthe status of the Renminbi without depreciation, safeguarding Chinas economicdevelopment and financial stability, and also winning much praise from internationalsociety.The Renminbi and Chinas modern finance:-The main body of Chinas financial system is made up of six state-owned exclusiveinvestment commercial banks, under the supervision of the Peoples Bank of China,the Insurance Regulatory Commission, the Securities Regulatory Commission andother financial administrative and regulatory bodies. Additionally, there are tennational commercial banks, 112 local or regional banks, and a large number of ruralcredit cooperatives covering Chinas financial domain. There are more than 180financial organizations that deal in foreign capital operating in China, including morethan 80 non-banking organizations under the supervision of the central banks that arealso very active, such as trust and investment companies, lease companies andfinancial service companies.Precautions Taken Against The Forging Of Banknotes:-The earliest measure taken in China as a precaution against forgery was the affixingof signatures to paper money. Later, because paper money was being produced inmuch larger quantities, the affixing of signatures also could only be accomplished aspart of the printing process. To guard against the production of counterfeit money,22 | P a g e
  23. 23. History Of Money in Chinawhen the printing plates were being engraved, some secret marks would frequently beplaced in inconspicuous places, and furthermore the paper used for printing moneywould often be watermarked beforehand. Modern banknotes also contain differentquantities of thin metal strips, a method that has greatly enhanced the effectiveness ofthe anti-forgery precautions.Bankcards of all colors and designs:-Under the driving force of the market economy, the scope of operations of every bankin the Chinese financial system continually expanded, and a diverse array ofbankcards emerged to meet the demands of the times. Bankcards reduced thefrequency of currency exchange in peoples lives, reduced the amount of wear andtear on currency, and simplified all kinds of banking operations, making banking amore convenient business for the people of China.The popularity of coin collecting China is one of the four great ancient civilizations ofthe world, a nation with a long history and profound culture. In the twenty-firstcentury, China is economically and culturally in the ascendant. Collecting has becomean important way for Chinese people to enrich their personal cultural lives andimprove their cultural understanding and accomplishments. There are already manyenthusiastic collectors and hobbyists in China and around the world who have takento collecting the various historical forms of money that have been used in Chinaduring past dynasties or in more recent eras.The Renminbi marches towards internationalization The effect of high-speed political,economic and cultural development is that Chinas status in international society isconstantly rising, and China is engaging more frequently in cultural and economicexchange and cooperation with other nations of the world, a situation that is reflectedin the numerous commemorative coins issued by Chinese banks in recent years. At thesame time, the influence of the Renminbi in the international financial world has beensteadily increasing, and it is now well on the way to becoming an internationallyrecognized currency.Reference:-  D.C. Twitchett. Financial Administration under the Tang Dynasty. Cambridge, 1970.  David Graeber: Debt: The First 5000 Years, Melville 2011. Cf.  David Hartill. Qing Cash (Royal Numismatic Society Special Publication 37). London, 2003.23 | P a g e
  24. 24. History Of Money in China  A snap shot view of THE HISTORY OF CHINA by YK Kwan   Shell Money before Qin Dynasty  Kramer, History Begins at Sumer, pp. 52–55.  Norman F. Gorny. Northern Song Dynasty Cash Variety Guide. Volume 1 Fugo Senshu. USA, 2001.  Phillips, Michael M.; Talley, Ian (2010-06-21). "Global Leaders Welcome Chinas Yuan Plan". Wall Street Journal.  Quentin Sommerville (13 March 2006). "China mulls Mao banknote change". BBC News, Shanghai. Retrieved 2007-03-18.  Richard Von Glahn. Fountain of Fortune (Money and Monetary Policy in China 1000-1700).California, 1996.  Shell Money before Qin Dynasty. Retrieved 2012-05-22.  Tullock, Gordon, “Paper Money – A Cycle in Cathay” Economic History Review, Vol. 9, No. 3  Tung Tso Pin. Chronological Tables of Chinese History. Hong Kong, 1960.  Volckart, O. “The Big Problem of the Petty Coins’ and how it could be solved in the Late Middle Ages”. LSE Economic History Working Papers 107/08, 2008.  Wang Yu-Chuan. Early Chinese Coinage. New York, 1980.  Wei, Jianyou (in Chinese) Zhongguo Jindai Huobi shi (A History of Money in Modern China). Shanghai: Qiuliang Publishers. 1955.  Xinjiang Numismatics. Ed. Zhu Yuanjie et al. Hong Kong, 1991.  Yang, Lien-sheng, Money and Credit in China, a Short History. Cambridge, MA: Harvard University Press 1952.  YK Kwan. "A snap shot view of the history of China by YK Kwan". Retrieved 2012-05-21.  中國古錢目錄 Zhongguo Gu Qian Mulu (Catalogue of Old Chinese Coins). 華光普 Hua Guangpu. Hunan, 1998.  中國錢幣大辭典 - 先秦編 Zhongguo Qianbi Da Cidian – Xian Qin Bian (Chinese Coin Encyclopaedia – Early Times to Qin). 李葆華 Li Paohua (ed.). Peking, 1995.  兩宋鐵錢 Liang Song Tie Qian (Iron Coins of the Two Song Dynasties). 閻福善 Yan Fushan (et al. eds). Peking, 2000.  咸豐泉匯 Xianfeng Quan Hui (A Collection of Xianfeng Coins). 馬定祥 Ma Dingxiang. Shanghai, 1994.  太平天國錢幣 Taiping Tianguo Qianbi (Coins of the Taiping Heavenly Kingdom). 馬定祥 馬傅 Ma Dingxiang & Ma Fude. Shanghai, 1983.  清朝錢譜 Shincho Senpu. (Qing Dynasty Cash Register). Hanawa Shiro. Tokyo, 1968.24 | P a g e