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Economy of the Song Dynasty

 

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Economy of the Song Dynasty



 
 
The Song Dynasty
Song Dynasty

The Song Dynasty was a ruling Chinese dynasty in China between 960–1279 AD; it succeeded the Five Dynasties and Ten Kingdoms Period, and was followed by the Yuan Dynasty....
 (960–1279) of China
China

China is a Culture of China, an ancient civilization, and, depending on perspective, a national or multinational entity extending over a large area in East Asia....
 was a period of Chinese history
History of China

China civilization originated in various city-states along the Yellow River valley in the Neolithic era. The written history of China begins with the Shang Dynasty ....
 marked by commercial expansion, economic prosperity, and revolutionary new economic concepts. Private trade grew and a market economy began to link the coastal provinces with the interior. The enormous population growth rate from increased agricultural cultivation in the 10th to 11th centuries doubled China's overall population, which rose above 100 million people (compared to the earlier Tang
Tang Dynasty

The Tang Dynasty was an Dynasties in Chinese history preceded by the Sui Dynasty and followed by the Five Dynasties and Ten Kingdoms Period. It was founded by the Li family, who seized power during the decline and collapse of the Sui Empire....
, with some 50 million people).

Beyond domestic profits made in China, merchants engaged in overseas trade by investing money in trading vessels that docked at foreign ports as far away as East Africa
East Africa

East Africa or Eastern Africa is the easterly region of the African continent, variably defined by geography or geopolitics. In the UN subregion, 19 territories constitute Eastern Africa:...
.






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The Song Dynasty
Song Dynasty

The Song Dynasty was a ruling Chinese dynasty in China between 960–1279 AD; it succeeded the Five Dynasties and Ten Kingdoms Period, and was followed by the Yuan Dynasty....
 (960–1279) of China
China

China is a Culture of China, an ancient civilization, and, depending on perspective, a national or multinational entity extending over a large area in East Asia....
 was a period of Chinese history
History of China

China civilization originated in various city-states along the Yellow River valley in the Neolithic era. The written history of China begins with the Shang Dynasty ....
 marked by commercial expansion, economic prosperity, and revolutionary new economic concepts. Private trade grew and a market economy began to link the coastal provinces with the interior. The enormous population growth rate from increased agricultural cultivation in the 10th to 11th centuries doubled China's overall population, which rose above 100 million people (compared to the earlier Tang
Tang Dynasty

The Tang Dynasty was an Dynasties in Chinese history preceded by the Sui Dynasty and followed by the Five Dynasties and Ten Kingdoms Period. It was founded by the Li family, who seized power during the decline and collapse of the Sui Empire....
, with some 50 million people).

Beyond domestic profits made in China, merchants engaged in overseas trade by investing money in trading vessels that docked at foreign ports as far away as East Africa
East Africa

East Africa or Eastern Africa is the easterly region of the African continent, variably defined by geography or geopolitics. In the UN subregion, 19 territories constitute Eastern Africa:...
. The world's first development of the banknote
Banknote

A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender....
, or printed paper money (see Jiaozi
Jiaozi (currency)

Jiaozi is a form of banknote which appeared in 10th century Sichuan. Most numismatists generally regard it as the first paper money in history, a development of the Chinese Song Dynasty ....
, Huizi
Huizi (currency)

The Huizi , issued in the year 1160, was the official banknote of the Chinese Song Dynasty. It has the highest amount of issuance among various banknote types during the Song Dynasty....
), was established on a massive scale. Combined with a unified tax system and efficient trade routes by road and canal, this meant the development of a true nationwide market system in China. Although much of the revenue in the central government's treasury
Treasury

A treasury is any place where the currency or items of high monetary value are kept. The term was first used in Classical antiquity times to describe the votive buildings erected to house Sacrifice, such as the Siphnian Treasury in Delphi or many similar buildings erected in Olympia, Greece by competing city-states to impress others during t...
 was consumed by the needs of the military defense budget
Military budget

A military budget of an entity, most often a nation or a state, is the budget and finances resources dedicated to raising and maintaining armed forces for that entity....
, government taxes imposed on the rising commercial base in China refilled the monetary coffers of the Song government. For certain production items and marketed goods, the Song government imposed monopolies in order to boost revenues and secure resources that were vital to the empire's security, such as steel, iron, and chemical components for gunpowder
Gunpowder

Gunpowder, also called black powder, is an explosive mixture of sulfur, charcoal and potassium nitrate, KNO3 that burns rapidly, producing volumes of hot solids and gases which can be used as a propellant in firearms and as a pyrotechnic composition in fireworks....
.

Agriculture


Massive Expansion of ploughland

The Song government encouraged people to reclaim barren lands and put them under cultivation. Anyone who opened up new lands and paid taxes were granted permanent possession of the new land. Under this policy, the cultivated land in the Song Dynasty is estimated to have reached a peak number of 720 million mu
Chinese units of measurement

File:Classicchineseinstrumentscale.jpgChinese units of measurement are the customary and traditional Units of measurements of measure used in the People's Republic of China....
, and was not surpassed by later Ming and Qing Dynasties.

Irrigation works

Prominent statesman and economist Wang Anshi
Wang Anshi

Wang Anshi was a China economist, statesman, Chancellor of China and poet of the Song Dynasty who attempted controversial, major socioeconomics social reforms....
 issued the Law and Decree on Irrigation in 1069 that encouraged expansion of the irrigation system in China. By 1076, about 10,800 irrigation projects were completed, which irrigated more than 36 million mu of public and private land. Major irrigation projects included dredging the Yellow River at northern China and artificial silt land in the Lake Tai valley. As a result of this policy, the crop in China trippled.

Improvements in Farm Tools, Seeds and Fertilizer

The Song Dynasty inherited the curved iron plough invented in the Tang Dynasty
Tang Dynasty

The Tang Dynasty was an Dynasties in Chinese history preceded by the Sui Dynasty and followed by the Five Dynasties and Ten Kingdoms Period. It was founded by the Li family, who seized power during the decline and collapse of the Sui Empire....
 (618–907) as described in detail in Lu Guimeng's The Classic of the Plough. The Song Dynasty improved on the Tang Dynasty curved iron plough and invented a special steel plough design specificily for reclaiming wasteland. The wasteland plough was not made of iron, but of stronger steel, the blade was shorter but thicker, and particularly effective in cutting through reeds and roots in wetlands in the Huai River
Huai River

The Huai River is a major river in China. The Huai River is located about mid-way between the Yellow River and Yangtze River, the two largest rivers in China, and like them runs from west to east....
 valley. A tool designed to facilitate seedling called "seedling horse" was invented in Song Dynasty; it was made of jujube
Jujube

Ziziphus zizyphus , commonly called Jujube, Red Date , or Chinese Date, is a species of Ziziphus in the buckthorn family Rhamnaceae, used primarily for its fruits....
 wood and paulownia wood. Song Dynasty farms used bamboo water wheel
Water wheel

A water wheel is a machine for converting the energy of flowing or falling water into more useful forms of power, a process otherwise known as hydropower....
s to harness the flow energy of rivers to raise water for irrigation of farmland.

The water wheel was about 30 chi
Chinese units of measurement

File:Classicchineseinstrumentscale.jpgChinese units of measurement are the customary and traditional Units of measurements of measure used in the People's Republic of China....
 in diameter, with ten bamboo watering tubes fastened at its perimeter. Some farmers even used three stage watering wheels to lift water to a height of over 30 chi.

High yield Champa
Champa

File:Shiva Dong Duong Style.jpgFile:VietnamChampa1.gifThe kingdom of Champa was an Indianized kingdom of Malayo-Polynesian origins and controlled what is now southern and central Vietnam from approximately the 7th century through to 1832....
 paddy seeds, Korean yellow paddy, Indian greenpea, and Middle East watermelon
Watermelon

Watermelon refers to both fruit and plant of a vine-like herb originally from southern Africa and one of the most common types of melon. This flowering plant produces a special type of fruit known by botany as a Epigynous berry, which has a thick Peel and fleshy center ; pepos are derived from an inferior ovary and are characteristic of...
 were introduced into China during this period, greatly enhancing the variety of farm produce. Song farmers emphasized the importance of night soil
Night soil

Night soil is a euphemism for human feces. "Night soil" is produced as a result of a waste management system in areas without community infrastructure such as a sewage system, or individual septic tank....
 as fertilizer
Fertilizer

Fertilizers are chemical compounds given to plants to promote growth; they are usually applied either through the soil, for uptake by plant roots, or by foliar feeding, for uptake through leaves....
. They understood that using night soil could transform barren wasteland into fertile farmland. Chen Pu wrote in his Book of Agriculture of 1149: "The common saying that farmland becomes exhausted after seeding three to five years is not right, if frequently top up with new soil and cure with night soil, then the land becomes more fertile".

Economic Crops

Bigdragoncake
Cotton was introduced from Hainan
Hainan

Hainan is the smallest Provinces of China of the People's Republic of China. Although the province comprises some two hundred islands scattered among three archipelagos off the southern coast, all but three percent of its land mass is on Hainan Island , from which the province takes its name....
 Island into central China. Cotton flowers were collected, pits removed, beaten loose with bamboo bows, and drawn into yarns and weaved into cloth called "jibei"."The cotton jibei made in Hai Nan has great variety, the cloth has great width, often dyed into brilliant colors, stitching up two pieces make a bedspread, stitching four pieces make a curtain Hemp was also widely planted and made into linen. Independent mulberry farms flouished in the Mount Dongting region in Suzhou
Suzhou

Suzhou is a city on the lower reaches of the Yangtze River and on the shores of Lake Taihu in the province of Jiangsu, China. The city is renowned for its beautiful stone bridges, pagodas, and meticulously designed Chinese garden which have contributed to its status as a great tourist attraction....
. The mulberry farmers did not make a living on farmland, but instead they grew mulberry trees and bred silkworm to harvest silk.

Sugarcane
Sugarcane

Sugarcane is a genus of 6 to 37 species of tall perennial plant Poaceae , native to warm temperate to tropical regions of the Old World. They have stout, jointed, fibrous stalks that are rich in sugar and measure 2 to 6 meters tall....
 first appeared in China during the Warring States Period
Warring States Period

The Warring States Period , also known as the Era of Warring States, covers the period from 476 BCE to the unification of China by the Qin Dynasty in 221 BCE....
. During the Song Dynasty, Lake Tai valley was famous for the sugarcanes cultivated. Song writer Wang Zhuo described in great detail the method of cultivating sugarcane and how to make cane sugar flour from sugarcane in his monography "Classic of Sugar" in 1154, the first book about sugar technology in China.

Tea
Tea

Tea refers to the agricultural products of the leaves, leaf buds, and internodes of the Camellia sinensis plant, prepared and cured by various methods....
 plantation in the Song Dynasty was three times the size that it was during the Tang Dynasty. According to a survey in 1162, tea plantations were spread across 66 prefectures in 244 counties.. The Beiyuan Plantation (North Park Plantation) was an imperial tea plantation in Fujian prefacture. It produced more than forty varieties of tribute tea for the imperial court. Only the very tip of tender tea leaves were picked, processed and pressed into tea cakes, embossed with dragon pattern, known as "dragon tea cakes".

With the growth of cities, high value vegetable farms sprung up in the suburbs. In southern China, on average one mu of paddy farm land supported one man, while in the north about three mu for one man, while one mu of vegetable farm supported three men..

Flower nurseries also flourished. Peony
Peony

The peony or paeony is the only genus in the flowering plant family Paeoniaceae. They are native to Asia, southern Europe and western North America....
 was the favourite of the rich and powerful. Up to ninety varieties of peony were cultivated. Jasmine and crabapple from Persia were also cultivated.

Organization, investment, and trade


During the Song Dynasty, the merchant class became more sophisticated, well-respected and organized than in earlier periods of China. Their accumulated wealth often rivaled that of the scholar-officials who administered the affairs of government. For their organizational skills, Ebrey, Walthall, and Palais state that Song Dynasty merchants:

...set up partnerships and joint stock companies
Joint stock company

A joint stock company is a type of business entity: it is a type of corporation or partnership between two. Certificates of ownership are issued by the company in return for each contribution, and the shareholders are free to transfer their ownership interest at any time by selling their stockholding to others....
, with a separation of owners (shareholder
Shareholder

A mutual shareholder or stockholder is an individual or company that legally owns one or more share s of stock in a joint stock company....
s) and managers. In the large cities, merchants were organized into guild
Guild

File:Windsorguildhall.jpgA guild is an association of artisan in a particular trade. The earliest guilds were formed as confraternities of workers....
s according to the type of product sold; they periodically set prices and arranged sales from wholesalers to shop owners. When the government requisitioned goods or assessed taxes, it dealt with the guild heads.


Although large government run industries and large privately-owned enterprise
Enterprise

Enterprise may refer to:...
s dominated the market system of urban China during the Song period, there was a plethora of small private businesses and entrepreneur
Entrepreneur

An entrepreneur is a person who has possession of an organization, or venture, and assumes significant accountability for the inherent risks and the outcome....
s throughout the large suburbs and rural areas that thrived off the economic boom of the period. There was even a large black market in China during the Song period, which was actually enhanced once the Jurchens
Jurchens

The Jurchens were a Tungusic peoples who inhabited the region of Manchuria until the 17th century, when they adopted the name Manchu. They established the Jin Dynasty between 1115 and 1122; it lasted until 1234 when the Mongols arrived....
 conquered northern China and established the Jin Dynasty. For example, around 1160 AD there was an annual black market smuggling of some 70 to 80 thousand cattle
Cattle

Cattle, colloquially referred to as cows, are domestication ungulates, a member of the subfamily Bovinae of the family Bovidae. They are raised as livestock for meat , dairy products , leather and as draft animals ....
. There were multitudes of successful small kiln
Kiln

Kilns are thermally insulated chambers, or ovens, in which controlled temperature regimes are produced. They are used to harden, burn or dry materials....
s and pottery
Pottery

Pottery is the ceramic ware made by potters. Major types of pottery include earthenware, stoneware, and porcelain. The places where such wares are made are called potteries....
 shops owned by local families, along with oil presses, wine
Wine

Wine is an alcoholic beverage often made of fermentation grape juice. The natural chemical balance of grapes is such that they can ferment without the addition of sugars, acids, enzymes or other nutrients....
-making shops, small local paper-making businesses, etc. There was also room for small economic success with the "inn
Inn

Inns are generally establishments or buildings where travelers can seek lodging and, usually, food and drink. They are typically located in the country or along a highway....
 keeper, the petty diviner, the drug seller, the cloth trader," and many others.

Rural families that sold a large agricultural surplus to the market not only could afford to buy more charcoal, tea, oil, and wine, but they could also amass enough funds to establish secondary means of production for generating more wealth. Besides necessary agricultural foodstuffs, farming families could often produce wine, charcoal, paper, textiles, and other goods they sold through brokers. Farmers in Suzhou
Suzhou

Suzhou is a city on the lower reaches of the Yangtze River and on the shores of Lake Taihu in the province of Jiangsu, China. The city is renowned for its beautiful stone bridges, pagodas, and meticulously designed Chinese garden which have contributed to its status as a great tourist attraction....
 often specialized in raising bombyx mori
Bombyx mori

The silkworm is the larva or caterpillar of Bombyx mori , the domesticated silkmoth. A moth in the family Bombycidae, it is very important economically as the producer of silk....
 to produce silk
Silk

Silk is a natural protein fiber, some forms of which can be weaving into textiles. The best-known type of silk is obtained from Pupa#Cocoons made by the larvae of the mulberry silkworm Bombyx mori reared in captivity ....
 wares, while in Fujian
Fujian

is one of the Province of China on the southeast coast of People's Republic of China. Fujian borders Zhejiang to the north, Jiangxi to the west, and Guangdong to the south....
, Sichuan
Sichuan

is a Province in western China proper with its capital in Chengdu. The current name of the province, ?? , is an abbreviation of ??? , or "Four circuit #Circuits in East Asia of rivers", which is itself abbreviated from ???? , or "Four circuits of rivers and gorges", named after the division of the existing circuit into four during the Song...
, and Guangdong
Guangdong

Guangdong is a political divisions of China on the southern coast of People's Republic of China. The province is also known by an alternative English language name, the Canton Province....
 farmers often grew sugarcane
Sugarcane

Sugarcane is a genus of 6 to 37 species of tall perennial plant Poaceae , native to warm temperate to tropical regions of the Old World. They have stout, jointed, fibrous stalks that are rich in sugar and measure 2 to 6 meters tall....
. In order to ensure the prosperity of rural areas, technical applications for public works projects and improved agricultural techniques were essential. The vast irrigation
Irrigation

Irrigation is an artificial application of water to the soil usually for assisting in growing crops. In crop production it is mainly used in dry areas and in periods of rainfall shortfalls, but also to protect plants against frost....
 system of China had to be furnished with multitudes of wheelwright
Wheelwright

A wheelwright is a person who builds or repairs wheels. This occupational name eventually became the English surname Wheelwright.Historically, these tradesmen made wheels for carts and wagons by first constructing the hub, the spokes and the rim/fellows segments and assembling them all into a unit working from the center of the whee...
s mass-producing standardized waterwheels and square-pallet chain pumps that could lift water from lower planes to higher irrigation planes.

For clothing, silken robes
Han Chinese clothing

Han Chinese clothing or Hanfu , also known as Hanzhuang , Huafu , or guzhuang , and sometimes referred in English sources simply as Silk Robe or Chinese Silk Robe refers to the historical dress of the Han Chinese people, which was worn for millennia before the conquest by the Manchus and the establishmen...
 were worn by the wealthy and elite while hemp
Hemp

File:Industrialhemp.jpgHemp is the common name for plants of the entire genus Cannabis, although the term is often used to refer only to Cannabis strains cultivated for industrial use....
 and ramie
Ramie

Ramie is a flowering plant in the nettle family Urticaceae, native to eastern Asia. It is a herbaceous perennial plant growing to 1 - 2.5 m tall; the leaf are heart-shaped, 7-15 cm long and 6-12 cm broad, and white on the underside with dense small hairs - this gives it a silvery appearance; unlike nettles, the hairs do not sting....
 was worn by the poor; by the late Song period cotton
Cotton

Cotton is a soft, staple fiber that grows in a form known as a boll around the seeds of the cotton plant a shrub native to tropical and subtropical regions around the world, including the Americas, India and Africa....
 clothes were also in use. Shipment of all these materials and goods was aided by the 10th century innovation of the canal pound lock
Pound lock

A pound lock is type of Lock that is used almost exclusively nowadays on canals and rivers. A pound lock has a chamber with floodgate at both ends that control the level of water in the pound....
 in China; the Song scientist and statesman Shen Kuo
Shen Kuo

Shen Kuo or Shen Kua , Chinese style name Cunzhong and Chinese style name#H?o Mengqi Weng, was a polymathic China History of science and technology in China and statesman of the Song Dynasty ....
 (1031ndash;1095) wrote that the building of pound lock gates at Zhenzhou (presumably Kuozhou along the Yangtze) during the 1020s and 1030s freed up the use of five hundred working laborers at the canal each year, amounting to the saving of up to 1,250,000 strings of cash
Cash (Chinese coin)

A cash was a type of coin of China and East Asia from the 2nd Century BC until the Anno Domini 20th century....
 annually. He wrote that the old method of hauling boats over limited the size of the cargo to 300 tan of rice per vessel (roughly 21 tons/21337 kg), but after the pound locks were introduced, boats carrying 400 tan (roughly 28 tons/28449 kg) could then be used. Shen wrote that by his time (c. 1080) government boats could carry cargo weights of up to 700 tan (49½ tons/50294 kg), while private boats could hold as much as 800 bags, each weighing 2 tan (i.e. a total of 113 tons/114813 kg).

Sea trade abroad to the South East Pacific, the Hindu world
History of India

The known history of India begins with the Indus Valley Civilization, which spread and flourished in the north-western part of the Indian subcontinent, from c....
, the Islamic world, and the East Africa
East Africa

East Africa or Eastern Africa is the easterly region of the African continent, variably defined by geography or geopolitics. In the UN subregion, 19 territories constitute Eastern Africa:...
n world brought merchants great fortune. Although the massive amount of indigenous trade along the Grand Canal
Grand Canal of China

The Grand Canal of China , also known as the Beijing-Hangzhou Grand Canal is the longest ancient canal or artificial river in the world....
, the Yangzi River
Yangtze River

The Yangtze River, or Chang Jiang , is the longest river in China and Asia, and the List of rivers by length in the world, after the Nile in Africa and the Amazon River in South America....
, its tributaries and lakes, and other canal systems trumped the commercial gains of overseas trade, there were still many large seaports during the Song period that bolstered the economy, such as Quanzhou
Quanzhou

Quanzhou is a prefecture-level city in southeastern Fujian province of China, People's Republic of China. It borders all other prefecture-level cities in Fujian but two and faces the Taiwan Strait....
, Fuzhou
Fuzhou

is the capital and the largest prefecture-level city of Fujian Provinces of China, People's Republic of China. It is also referred to as Rongcheng which means "city of banyan trees" and Mindong ...
, Guangzhou
Guangzhou

'Guangzhou' is the Capital and a sub-provincial city of Guangdong Province of China in the northern and southern China part of the People's Republic of China....
, and Xiamen
Xiamen

Xiamen, also known as Amoy , is a coastal sub-provincial city in southeastern Fujian province of China, People's Republic of China. It looks out to the Taiwan Strait and borders Quanzhou to the north and Zhangzhou to the south....
. These seaports, now heavily connected to the hinterland via canal, lake, and river traffic, acted as a long string of large market centers for the sale of cash crops produced in the interior. The high demand in China for foreign luxury goods and spice
Spice

A spice is a dried seed, fruit, root, bark, leaf, or vegetable used in nutritionally insignificant quantities as a food additive for the purpose of flavor, color, or as a preservative that kills harmful bacteria or prevents their growth....
s coming from the East Indies facilitated the growth of Chinese maritime trade abroad during the Song period. Along with the mining
Mining

Mining is the extraction of value minerals or other geology materials from the earth, usually from an ore body, vein or seam. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, Sodium chloride and potash....
 industry, the shipbuilding
Shipbuilding

Shipbuilding is the construction of ships. It normally takes place in a specialized facility known as a shipyard. Shipbuilders, originally called shipwrights, follow a specialized occupation that traces its roots to before recorded history....
 industry of Fujian
Fujian

is one of the Province of China on the southeast coast of People's Republic of China. Fujian borders Zhejiang to the north, Jiangxi to the west, and Guangdong to the south....
 province during the Song period increased its production exponentially as maritime trade was given more importance and as the province's population growth began to increase dramatically. The Song capital at Hangzhou
Hangzhou

is a sub-provincial city located in the Yangtze River Delta in the People's Republic of China, and the capital of Zhejiang Provinces of China....
 had a large canal that connected its waterways directly to the seaport at Mingzhou (modern Ningbo
Ningbo

Ningbo is a seaport with sub-provincial city. The city has a population of 2,182,000 and is situated in northeastern Zhejiang province of China, People's Republic of China....
), the center where many of the foreign imported goods were shipped out to the rest of the country. Despite the installation of fire station
Fire station

A fire station is a structure or other area set aside for storage of firefighter apparatus , personal protective equipment, fire hose, fire extinguishers, and other fire extinguishing equipment....
s and a large fire fighting
Fire fighting

Firefighting is the act of extinguishing destructive fires. A firefighter fights these fires to prevent destruction of life, property and the environment....
 force, fires continued to threaten the city of Hangzhou and the various businesses within it. In safeguarding stored supplies and providing rented space for merchants and shopkeepers to keep their surplus goods safe from city fires, the rich families of Hangzhou, palace eunuchs, and empresses had large warehouse
Warehouse

A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc....
s built near the northeast walls; these warehouses were surrounded by channels of water on all sides and were heavily guarded by hired night watchmen. Shipbuilders generated means of employment for many skilled craftsmen, while sailors for ship crews found many opportunities of employment as more families had enough capital to purchase boats and invest in commercial trading abroad. Foreigners and merchants from abroad had an impact on the economy from within China as well. For example, many Muslims went to Song China not only to trade, but dominated the import and export industry and in some cases became officials of economic regulations. For Chinese maritime merchants, however, there was risk involved in such long overseas ventures to foreign trade posts and seaports as far away as Egypt
Egypt

Egypt is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Western Asia. Covering an area of about , Egypt borders the Mediterranean Sea to the north, the Gaza Strip and Israel to the northeast, the Red Sea to the east, Sudan to the south and Libya to the west....
. In order to reduce the risk of losing money instead of gaining it on maritime trade missions abroad:

[Song era] investors usually divided their investment among many ships, and each ship had many investors behind it. One observer thought eagerness to invest in overseas trade was leading to an outflow of copper cash. He wrote, "People along the coast are on intimate terms with the merchants who engage in overseas trade, either because they are fellow-countrymen or personal acquaintances...[They give the merchants] money to take with them on their ships for purchase and return conveyance of foreign goods. They invest from ten to a hundred strings of cash, and regularly make profits of several hundred percent."


Wealthy landholders were still typically those who were able to educate their sons to the highest degree. Hence small groups of prominent families in any given local county would gain national spotlight for having sons travel far off to be educated and appointed as ministers of the state. Yet downward social mobility was always an issue with the matter of divided inheritance. Suggesting ways to increase a family's property, Yuan Cai
Yuan Cai

Yuan Cai was a Song dynasty scholar and official, best known for penning the Yuan shi shi fan, a manual of advice addressed to family heads on the subject of how to handle their responsibilities....
 (1140–1190) wrote in the late 12th century that those who obtained office with decent salaries shouldn't convert it to gold and silver, but instead could watch their values grow with investment:

For instance, if he had 100,000 strings worth of gold and silver and used this money to buy productive property, in a year he would gain 10,000 strings; after ten years or so, he would have regained the 100,000 strings and what would be divided among the family would be interest. If it were invested in a pawn broking
Pawnbroker

A pawnbroker is an individual or business that offers monetary loans in exchange for an item of value that is given to the pawn broker. The word pawn is derived from the Latin pignus, for Pledge , and the items having been pawned to the broker are themselves called pledges or pawns, or simply the collateral ....
 business, in three years the interest would equal the capital. He would still have the 100,000 strings, and the rest, being interest, could be divided. Moreover, it could be doubled again in another three years, ad infinitum.


Shen Kuo
Shen Kuo

Shen Kuo or Shen Kua , Chinese style name Cunzhong and Chinese style name#H?o Mengqi Weng, was a polymathic China History of science and technology in China and statesman of the Song Dynasty ....
 (1031–1095), a minister of finance, was of the same opinion; in his understanding of the velocity of circulation, he stated in 1077:

The utility of money derives from circulation and loan-making. A village of ten households may have 100,000 coins. If the cash is stored in the household of one individual, even after a century, the sum remains 100,000. If the coins are circulated through business transactions so that every individual of the ten households can enjoy the utility of the 100,000 coins, then the utility will amount to that of 1,000,000 cash. If circulation continues without stop, the utility of the cash will be beyond enumeration.


The author Zhu Yu
Zhu Yu (author)

Zhu Yu was an author of the Chinese Song Dynasty . Between 1111 and 1117 AD, Zhu Yu wrote the book Pingzhou Ketan , and had it published in 1119 AD....
 wrote in his Pingzhou Ketan (????; Pingzhou Table Talks) of 1119 AD about the organization, maritime practices, and government standards of seagoing vessels, their merchants, and sailing crews. His book stated:

According to government regulations concerning seagoing ships, the larger ones can carry several hundred men, and the smaller ones may have more than a hundred men on board. One of the most important merchants is chosen to be Leader (Gang Shou), another is Deputy Leader (Fu Gang Shou), and a third is Business Manager (Za Shi). The Superintendent of Merchant Shipping gives them an unofficially sealed red certificate permitting them to use the light bamboo for punishing their company when necessary. Should anyone die at sea, his property becomes forfeit to the government...The ship's pilots are acquainted with the configuration of the coasts; at night they steer by the stars, and in the day-time by the sun. In dark weather they look at the south-pointing needle (i.e. the magnetic compass
Compass

A compass, magnetic compass or mariner's compass is a navigational instrument for determining direction relative to the earth's magnetic poles....
). They also use a line a hundred feet long with a hook at the end which they let down to take samples of mud from the sea-bottom; by its (appearance and) smell they can determine their whereabouts.


Foreign travelers to China often made remarks on the economic strength of the country. The later Muslim Moroccan
Moroccan

Moroccan may refer to:* Something of, from, or related to Morocco, ia country located in North Africa** A person from Morocco, or of Moroccan descent....
 Berber
Berber people

Berbers are the indigenous ethnic groups of North Africa west of the Nile Valley. They are discontinuously distributed from the Atlantic to the Siwa oasis, in Egypt, and from the Mediterranean to the Niger River....
 traveler Ibn Batutta (1304–1377) wrote about many of his travel experiences in places across the Eurasian world, including China at the farthest eastern extremity. After describing lavish Chinese ships holding palatial cabins and saloons, along with the life of Chinese ship crews and captains, Batutta wrote:

Among the inhabitants of China there are those who own numerous ships, on which they send their agents to foreign places. For nowhere in the world are there to be found people richer than the Chinese.


Handicraft industry


Steel and iron industries

Accompanying the widespread printing of paper money was the beginnings of what one might term an early Chinese industrial revolution
Industrial Revolution

The Industrial Revolution was a period in the late 18th and early 19th centuries when major changes in agriculture, manufacturing, production, and transportation had a profound effect on the socioeconomics and cultural conditions in United Kingdom....
. For example the historian Robert Hartwell has estimated that per capita iron
Iron

Iron is a chemical element with the symbol Fe and atomic number 26. Iron is a Group 8 element and period 4 element. Iron is lustrous and silvery in color....
 output rose sixfold between 806 and 1078, such that, by 1078 China was producing 127000000 kg (125,000 t) in weight of iron per year. In the smelting process of using huge bellows
Bellows

A bellows is a device for delivering pressurized air in a controlled quantity to a controlled location. Basically, a bellows is a deformable container which has an outlet nozzle....
 driven by waterwheels, massive amounts of charcoal
Charcoal

Charcoal is the blackish residue consisting of impure carbon obtained by removing water and other volatile constituents from animal and vegetation substances....
 were used in the production process, leading to a wide range of deforestation
Deforestation

Deforestation is the logging or burning of trees in forested areas. There are several reasons for doing so: trees or derived charcoal can be sold as a commodity and are used by humans while cleared land is used as pasture, plantations of commodities and human settlement....
 in northern China. However, by the end of the 11th century the Chinese discovered that using bituminous coke
Coke (fuel)

Cokes are the solid carbonaceous material derived from destructive distillation of low-ash, low-sulfur bituminous coal. Cokes from coal are grey, hard, and porous....
 could replace the role of charcoal, hence many acres of forested land in northern China were spared from the steel
Steel

Steel is an alloy consisting mostly of iron, with a carbon content between 0.2% and 2.14% by weight , depending on grade. Carbon is the most cost-effective alloying material for iron, but various other alloying elements are used such as manganese, chromium, vanadium, and tungsten....
 and iron industry with this switch of resources. Iron and steel of this period were used to mass produce plough
Plough

The plough is a tool used in farming for initial cultivation of soil in preparation for sowing seed or planting. It has been a basic instrument for most of recorded history, and represents one of the major advances in agriculture....
s, hammers, needles, pins, nails for ships, musical cymbal
Cymbal

Cymbals are a modern percussion instrument. Cymbals consist of thin, normally round plates of various cymbal alloys; see cymbal making for a discussion of their manufacture....
s, chains for suspension bridge
Suspension bridge

A suspension bridge is a type of bridge where the main load-bearing elements are hung from suspension cables. While modern suspension bridges with level decks date from the early 19th century, earlier types are reported from the 3rd century BC....
s, Buddhist statues, and other routine items for an indigenous mass market. Iron was also a necessary manufacturing component for the production processes of salt and copper. Many newly constructed canal
Canal

Canals are artificial channels for water. There are two types of canals: Aqueduct canals, which are used for the conveyance and delivery of water, and waterways, which are navigable transportation canals used for passage of goods and people, often connected to existing lakes, rivers, or oceans....
s linked the major iron and steel production centers to the capital city's main market. This was also extended to trade with the outside world, which greatly expanded with the high level of Chinese maritime activity abroad during the Southern Song period.

Through many written petition
Petition

A petition is a request to change some thing, most commonly made to a government official or public entity. Petitions to a deity are a form of prayer....
s to the central government by regional administrators of the Song Empire, historical scholars can piece evidence together to appropriate the size and scope of the Chinese iron industry during the Song era. The famed magistrate Bao Qingtian
Bao Qingtian

Bao Zheng , courtesy name Xiren ??,posthumous title Xiaosu ?? was a much-praised official who served during the reign of Emperor Renzong of Song Dynasty China....
 (999–1062) wrote of the iron industry at Hancheng, Tongzhou Prefecture, along the Yellow River
Yellow River

The Yellow River or Huang He / Hwang Ho is the second-longest river in China and the List of rivers by length in the world at 4,845 kilometers ....
 in what is today eastern Shaanxi
Shaanxi

is a north-central political divisions of China of the People's Republic of China, and includes portions of the Loess Plateau on the middle reaches of the Yellow River as well as the Qinling Mountains across the southern part of the province....
 province, with iron smelting households that were overseen by government regulators. He wrote that 700 such households were acting as iron smelters, with 200 having the most adequate amount of government support, such as charcoal supplies and skilled craftsmen (the iron households hired local unskilled labor themselves). Bao's complaint to the throne was that government laws against private smelting in Shaanxi hindered profits of the industry, so the government finally heeded his plea and lifted the ban on private smelting for Shaanxi in 1055. The result of this was an increase in profit (with lower prices for iron) as well as production; 100,000 jin (60 tonne
Tonne

A tonne or metric ton , also referred to as a metric tonne, is a measurement of mass equal to 1,000 kilograms, or 2204.6226 pounds....
s) of iron was produced annually in Shaanxi in the 1040s AD, increasing to 600,000 jin (360 tonnes) produced annually by the 1110s, furbished by the revival of the Shaanxi mining
Mining

Mining is the extraction of value minerals or other geology materials from the earth, usually from an ore body, vein or seam. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, Sodium chloride and potash....
 industry in 1112. Although the iron smelters of Shaanxi were managed and supplied by the government, there were many independent smelters operated and owned by rich families. While acting as governor of Xuzhou
Xuzhou

Xuzhou , known as Pengcheng in ancient times, is the forth largest prefecture-level city in Jiangsu province of China, People's Republic of China....
 in 1078, the famous Song poet and statesman Su Shi
Su Shi

Su Shi was a List of Chinese authors, List of Chinese language poets, artist, East Asian calligraphy, pharmacologist, and statesman of the Song Dynasty, and one of the major poets of the Song era....
 (1037–1101) wrote that in the Liguo Industrial Prefecture under his administered region, there were 36 iron smelters run by different local families, each employing a work force of several hundred people to mine ore, produce their own charcoal, and smelt iron.

Gunpowder production

During the Song period, there was a great deal of organized labor and bureaucracy involved in the extraction of resources from the various provinces in China. The production of sulfur
Sulfur

Sulfur or sulphur is the chemical element that has the atomic number 16. It is denoted with the symbol S. It is an abundant Valence non-metal....
, which the Chinese called 'vitriol liquid', was extracted from pyrite
Pyrite

The mineral pyrite, or iron pyrite, is an iron sulfide with the chemical formula ironsulfur2. This mineral's metallic Lustre and pale-to-normal, brass-yellow hue have earned it the nickname fool's gold due to its resemblance to gold....
 and used for pharmaceutical purposes as well as for the creation of gunpowder
Gunpowder

Gunpowder, also called black powder, is an explosive mixture of sulfur, charcoal and potassium nitrate, KNO3 that burns rapidly, producing volumes of hot solids and gases which can be used as a propellant in firearms and as a pyrotechnic composition in fireworks....
. This was done by roasting iron pyrites, converting the sulphide to oxide
Oxide

An oxide is a chemical compound contaning at least one oxygen atom as well as at least one other element. Most of the Earth's crust consists of oxides....
, as the ore was piled up with coal briquettes in an earthenware furnace with a type of still-head to send the sulphur over as vapour, after which it would solidify and crystallize. The historical text of the Song Shi (History of the Song, compiled in 1345 AD) stated that the major producer of sulfur in the Tang and Song dynasties was the Jin Zhou sub-provincial administrative region (modern Linfen
Linfen

Linfen is a prefecture-level city in southern Shanxi province, People's Republic of China. It is situated along the banks of the Fen River. It was known as Pingyang during the Spring and Autumn Period....
 in southern Shanxi
Shanxi

is a political divisions of China in the North China of the People's Republic of China. Its one-character abbreviation is Jin , after the state of Jin that existed here during the Spring and Autumn Period....
). The bureaucrats appointed to the region managed the industrial processing and sale of it, and the amount created and distributed from the years 996 to 997 alone was 405,000 jin (roughly 200 tons). It was recorded that in 1076 AD the Song Dynasty government held a strict commercial monopoly on sulfur production, and if dye
Dye

A dye can generally be described as a colored substance that has an Chemical affinity to the Wiktionary:substrate to which it is being applied....
 houses and government workshops sold their products to private dealers in the black market, they were subject to meted penalties by government authorities. Even before this point, in 1067 AD, the Song government had issued an edict that the people living in Shanxi
Shanxi

is a political divisions of China in the North China of the People's Republic of China. Its one-character abbreviation is Jin , after the state of Jin that existed here during the Spring and Autumn Period....
 and Hebei
Hebei

For the people of Hebei, see Hebei people is a North China province of China of the People's Republic of China. Its one-Chinese character abbreviation is "" , named after Ji Province , a Han Dynasty province that included southern Hebei....
 were forbidden to sell foreigners any products containing saltpetre and sulfur. This act by the Song government displayed their fears of the grave potential of gunpowder weapons being developed by Song China's territorial enemies as well (i.e. the Tangut
Tangut

The Tangut , identified with the state of Western Xia, were a Qiangic languages-speaking people who moved to Northwest China sometime before the 10th century AD....
s and Khitan
Khitan

The history of the Khitans dates back to the 4th century. The Khitan people dominated much of Mongolia, and modern Manchuria by the 10th century under the Liao Dynasty, and eventually collapsed by 1125 ....
s).

Since Jin Zhou was in close proximity to the Song capital at Kaifeng
Kaifeng

Kaifeng , formerly known as Bianliang , Bianjing , Daliang , or simply Liang , is a prefecture-level city in eastern Henan province of China, People's Republic of China....
, the latter became the largest producer of gunpowder during the Northern Song period. With enhanced sulfur from pyrite instead of natural sulfur (along with ehanced potassium nitrate
Potassium nitrate

Potassium nitrate is a chemical compound with the chemical formula PotassiumNitrogenOxygen3. A naturally occurring mineral source of nitrogen, KNO3 constitutes a critical oxidation component of black powder/gunpowder....
), the Chinese were able to shift the use of gunpowder from an incendiary
Incendiary

Incendiary, meaning "capable of causing fire", may refer to:* Incendiary device, designed to cause fires* Incendiary , by Chris Cleave* Incendiary , by Sharon Maguire...
 use into an explosive one for early artillery
Artillery

Artillery is a military Combat Arms which employs any apparatus, machine, an assortment of tools or instruments, a system or systems used as weapons for the discharge of large projectiles in combat as a major contribution of fire power within the overall military capability of an armed force....
. There were large manufacturing plants in the Song Dynasty for the purpose of making 'fire-weapons' employing the use of gunpowder, such as fire lance
Fire lance

The fire lance or fire spear is one of the first gunpowder warfare in the world....
s and fire arrow
Fire Arrow

The Fire Arrow is a projectile weapon that uses black powder. The earliest reference to its use comes in the Collection of the Most Important Military Techniques written in 1044....
s. While engaged in a war with the Mongols, in the year 1259 the official Li Zengbo wrote in his Ko Zhai Za Gao, Xu Gao Hou that the city of Qingzhou
Qingzhou

Qingzhou is a county-level city, which is located in the west of Weifang City, Shandong Province, China. Qingzhou is a dynamic industry city, and also grows a great number of farm products....
 was manufacturing one to two thousand strong iron-cased bomb shells a month, dispatching to Xiangyang
Xiangyang

Xiangyang was a China city famous for the Siege of Xiangyang by invading forces of the Mongol-founded Yuan Dynasty. It was also an important city during the period of the Three Kingdoms, in the Romance of Three Kingdoms it was said that it was nearby Xiangyang that Zhuge Liang received his three visits from Liu Bei....
 and Yingzhou about ten to twenty thousand such bombs at a time. One of the main armories
Armory (military)

File:Armeria001.JPGAn armory is a military depot used for the storage of weapons and ammunition. The term may also apply to an area within a building, used for the storage of weapons....
 and arsenal
Arsenal

An arsenal is an establishment for the construction, repair, storage and issue of weapons and ammunition. The word arsenal appears in various forms in Romance languages , i.e....
s for the storage of gunpowder and weapons was located at Weiyang
Weiyang

Weiyang District is a District of Yangzhou, Jiangsu, China.External links...
, which accidentally caught fire and produced a massive explosion in 1280 AD.

Commerce

This arrangement of allowing competitive industry to flourish in some regions while setting up its opposite of strict government-regulated and monopolized
Monopoly

In economics, a monopoly exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it....
 production and trade in others was not exclusive to iron manufacturing. In the beginning of the Song Dynasty, the government supported competitive silk
Silk

Silk is a natural protein fiber, some forms of which can be weaving into textiles. The best-known type of silk is obtained from Pupa#Cocoons made by the larvae of the mulberry silkworm Bombyx mori reared in captivity ....
 mills and brocade
Brocade

File:Russian brocade.jpgBrocade is a class of richly decorative shuttle fabrics, often made in colored silks and with or without gold and silver threads....
 workshop
Workshop

A workshop is a room or building which provides both the area and tools that may be required for the manufacture or repair of Manufacturing Good ....
s in the eastern provinces and in the capital city of Kaifeng
Kaifeng

Kaifeng , formerly known as Bianliang , Bianjing , Daliang , or simply Liang , is a prefecture-level city in eastern Henan province of China, People's Republic of China....
. However, at the same time the government established strict legal prohibition
Prohibition

Prohibition of alcohol, often referred to simply as prohibition, also known as The Noble Experiment, refers to a sumptuary law which prohibits alcohol....
 on the merchant trade of privately produced silk in Sichuan
Sichuan

is a Province in western China proper with its capital in Chengdu. The current name of the province, ?? , is an abbreviation of ??? , or "Four circuit #Circuits in East Asia of rivers", which is itself abbreviated from ???? , or "Four circuits of rivers and gorges", named after the division of the existing circuit into four during the Song...
 province. This prohibition dealt an economic blow to Sichuan that caused a small rebellion (which was subdued), yet in the Song Dynasty Sichuan was well-known for its independent industries producing timber
Timber

Timber may refer to:* Lumber, i.e. wood materials* Timber, Oregon, an unincorporated community in the U.S. state of Oregon* Timber , a 1984 arcade game by Bally Midway...
 and cultivated oranges
Orange (fruit)

An orange?specifically, the sweet orange?is the citrus Citrus sinensis and its fruit. The orange is a Hybrid of ancient cultivated origin, possibly between pomelo and tangerine ....
. The reforms of the Chancellor
Chancellor of China

The Chancellor , variously translated as Prime Minister, Premier or Chief Councillor, was a generic name given to the highest-ranking official in the imperial government in ancient China....
 Wang Anshi
Wang Anshi

Wang Anshi was a China economist, statesman, Chancellor of China and poet of the Song Dynasty who attempted controversial, major socioeconomics social reforms....
 (1021–1086) sparked heated debate amongst ministers of court when he nationalized
Nationalization

Nationalization, also spelled nationalisation, is the act of taking an industry or assets into the public ownership of a national government or state....
 the industries manufacturing, processing, and distributing tea
Tea

Tea refers to the agricultural products of the leaves, leaf buds, and internodes of the Camellia sinensis plant, prepared and cured by various methods....
, salt
Salt

A salt, in chemistry, is defined as the product formed from the neutralisation reaction of acids and base . Salts are ionic compounds composed of cations and anions so that the product is electrically electric charge ....
, and wine
Wine

Wine is an alcoholic beverage often made of fermentation grape juice. The natural chemical balance of grapes is such that they can ferment without the addition of sugars, acids, enzymes or other nutrients....
. The state monopoly on Sichuan tea was the prime source of revenue for the state's purchase of horses in Qinghai
Qinghai

is a provinces of China of the People's Republic of China, named after Qinghai Lake. It borders Gansu on the northeast, the Xinjiang on the northwest, Sichuan on the southeast, and Tibet Autonomous Region on the southwest....
 for the Song army's cavalry forces. The restrictions on the private manufacture and trade of salt were even criticized in a famous poem by Su Shi
Su Shi

Su Shi was a List of Chinese authors, List of Chinese language poets, artist, East Asian calligraphy, pharmacologist, and statesman of the Song Dynasty, and one of the major poets of the Song era....
, and while the opposing politically-charged faction at court gained advantage and lost favor, Wang Anshi's reforms were continually abandoned and reinstated. Despite this political quarrel, the Song Empire's main source of revenue continued to come from state-managed monopolies and indirect tax
Indirect tax

The term indirect tax has more than one meaning.In the colloquial sense, an indirect tax is a tax collected by an intermediary from the person who bears the ultimate economic burden of the tax ....
es. As for private entrepreneurship, great profits could still be pursued by the merchants in the luxury item trades and specialized regional production. For example, the silk producers of Raoyang County, Shenzhou Prefecture, southern Hebei
Hebei

For the people of Hebei, see Hebei people is a North China province of China of the People's Republic of China. Its one-Chinese character abbreviation is "" , named after Ji Province , a Han Dynasty province that included southern Hebei....
 province were especially known for producing silken headwear for the Song emperor and high court officials in the capital.

Copper resources and receipts of deposit

Jiao Zi
The root of the development of the banknote
Banknote

A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender....
 goes back to the earlier Tang Dynasty
Tang Dynasty

The Tang Dynasty was an Dynasties in Chinese history preceded by the Sui Dynasty and followed by the Five Dynasties and Ten Kingdoms Period. It was founded by the Li family, who seized power during the decline and collapse of the Sui Empire....
 (618–907), when the government outlawed the use of bolts of silk
Silk

Silk is a natural protein fiber, some forms of which can be weaving into textiles. The best-known type of silk is obtained from Pupa#Cocoons made by the larvae of the mulberry silkworm Bombyx mori reared in captivity ....
 as currency, which increased the use of copper
Copper

Copper is a chemical element with the symbol Cu and atomic number 29.It is a ductile metal with very high thermal and electrical conductivity....
 coinage as money. By the year 1085 the output of copper currency
Currency

A currency is a Medium of exchange, facilitating the trade of goods and/or Service s. It is coins and paper bills used as money. It is one form of money, where money is anything that serves as a medium of exchange, a store of value, and a standard of value....
 was driven to a rate of 6 billion coins a year up from 5.86 billion in 1080 (compared to just 327 million coins minted annually in the Tang Dynasty
Tang Dynasty

The Tang Dynasty was an Dynasties in Chinese history preceded by the Sui Dynasty and followed by the Five Dynasties and Ten Kingdoms Period. It was founded by the Li family, who seized power during the decline and collapse of the Sui Empire....
's prosperous Tianbao period
Chinese era name

A Chinese era name is the era name, reign period, or regnal title used when traditionally numbering years in an emperor's reign and naming certain Chinese rulers ....
 of 742–755, and only 220 million coins minted annually from 118 BC to 5 AD during the Han Dynasty
Han Dynasty

The Han Dynasty followed the Qin Dynasty and preceded the Three Kingdoms in China. The Han Dynasty was ruled by the family known as the Liu clan who had peasant origins....
). This displayed evidence of remarkable and unprecedented expansion of Song China's economic power, in consideration of the output of coinage currency in the earlier year of 997 AD, which was only 800 million coins a year. In the year 1120 alone, the Song government collected 18,000,000 ounces of silver in taxes. With many 9th century Tang era merchants avoiding the weight and bulk of so many copper coins in each transaction, this led them to using trading receipt
Receipt

A receipt is a written acknowledgement that a specified article or sum of money has been received as an exchange for goods or services. The receipt acts as the Title to the property obtained in the exchange....
s from deposit shops where goods or money were left previously. Merchants would deposit copper currency into the stores of wealthy families and prominent wholesalers, whereupon they would receive receipts that could be cashed in a number of nearby towns by accredited persons. Since the 10th century, the early Song government began issuing their own receipts of deposit, yet this was restricted mainly to their monopolized salt industry and trade. China's first official regional paper-printed money can be traced back to the year 1024, in Sichuan
Sichuan

is a Province in western China proper with its capital in Chengdu. The current name of the province, ?? , is an abbreviation of ??? , or "Four circuit #Circuits in East Asia of rivers", which is itself abbreviated from ???? , or "Four circuits of rivers and gorges", named after the division of the existing circuit into four during the Song...
 province. Robert Temple says that the Sichuan bills can be traced back to 1023; before that year, sixteen private businesses or 'bank
Bank

A bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money. It is an institution for receiving, keeping, and lending money....
s' issued notes of exchange, but in that year the Song government took over this enterprise under an official agency.

Although the output of copper currency had expanded immensely by 1085, some fifty copper mines were shut down between the years 1078 and 1085. Although there were on average more copper mines found in Northern Song China than in the previous Tang Dynasty, this case was reversed during the Southern Song with a sharp decline and depletion of mined copper deposits by 1165. Even though copper cash was abundant in the late 11th century, Chancellor Wang Anshi's tax substitution for corvée
Corvée

Corv?e is labour, often but not always unpaid, that persons in power have authority to compel their subjects to perform, unless commuted in some way, such as by a cash payment; sometimes this was an option of the payer, sometimes of the payee, and sometimes not an option....
 labor and government takeover of agricultural finance loans meant that people now had to find additional cash, driving up the price of copper money which would become scarce. To make matters worse, large amounts of government-issued copper currency exited the country via international trade, while the Liao Dynasty
Liao Dynasty

The Liao Dynasty , 907-1125, also known as the Khitan Empire , was an empire in East Asia that ruled over the regions of Manchuria, Mongolia, and parts of northern China proper....
 and Western Xia
Western Xia

The Western Xia Dynasty or the Tangut Empire was a state that existed from 1038 up to 1227 in what are now the northwestern provinces of China of Gansu, Shaanxi, and Ningxia....
 actively pursued the exchange of their iron-minted coins for Song copper coins. The government attempted to prohibit the use of copper currency in border regions and in seaports, but the Song-issued copper coin became common in the Liao, Western Xia, Japan
Japan

Japan is an island country in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, People's Republic of China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south....
ese, and Southeast Asia
Southeast Asia

Southeast Asia or Southeastern Asia is a subregion of Asia, consisting of the countries that are geographically south of China, east of India and north of Australia....
n economies. The Song government would turn to other types of material for its currency in order to ease the demand on the government mint, including the issuing of iron coinage and paper banknotes. In the year 976, the percentage of issued currency using copper coinage was 65%; after 1135, this had dropped significantly to 54%, a government attempt to debase the copper currency.

The world's first paper money

The central government soon observed the economic advantages of printing paper money, issuing a monopoly
Monopoly

In economics, a monopoly exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it....
 right of several of the deposit shops to the issuance of these certificates of deposit. By the early 12th century, the amount of banknotes issued in a single year amounted to an annual rate of 26 million strings of cash coins. By the 1120s the central government officially stepped in and produced their own state-issued paper money (using woodblock printing
Woodblock printing

Woodblock printing is a technique for printing text, or patterns used widely throughout East Asia and originating in China in antiquity as a method of printing on textiles and later paper....
). Even before this point, the Song government was amassing large amounts of paper tribute
Tribute

A tribute is wealth one party gives to another as a sign of respect or, as was often case in historical contexts, of submission or allegiance....
. It was recorded that each year before 1101 AD, the prefecture of Xinan (modern Xi-xian, Anhui
Anhui

Anhui is a province of China of the People's Republic of China. Located in eastern China across the basins of the Yangtze River and the Huaihe River, it borders Jiangsu to the east, Zhejiang to the southeast, Jiangxi to the south, Hubei to the southwest, Henan to the northwest, and Shandong for a tiny section in the north....
) alone would send 1,500,000 sheets of paper in seven different varieties to the capital at Kaifeng. In that year of 1101, the Emperor Huizong of Song decided to lessen the amount of paper taken in the tribute quota, because it was causing detrimental effects and creating heavy burdens on the people of the region. However, the government still needed masses of paper product for the exchange certificates and the state's new issuing of paper money. For the printing of paper money alone, the Song court established several government-run factories in the cities of Huizhou
Huizhou

Huizhou is a prefecture-level city in Guangdong province of China, People's Republic of China. Part of the Pearl River Delta, Huizhou borders the provincial capital of Guangzhou to the west, Shaoguan to the north, Heyuan to the northeast, Shanwei to the east, Shenzhen and Dongguan to the southwest, and looks out to the South China Sea to the...
, Chengdu
Chengdu

Chengdu , located in southwest People's Republic of China, is the capital of Sichuan provinces of China and a sub-provincial city. Chengdu is also one of the most important economic centers and transportation and communication hubs in Southwestern China....
, Hangzhou
Hangzhou

is a sub-provincial city located in the Yangtze River Delta in the People's Republic of China, and the capital of Zhejiang Provinces of China....
, and Anqi. The size of the workforce employed in these paper money factories were quite large, as it was recorded in 1175 AD that the factory at Hangzhou alone employed more than a thousand workers a day. However, the government issues of paper money were not yet nationwide standards of currency at that point; issues of banknotes were limited to regional zones of the empire, and were valid for use only in a designated and temporary limit of 3-year's time. The geographic limitation changed between the years 1265 and 1274, when the late Southern Song government finally produced a nationwide standard currency of paper money, once its widespread circulation was backed by gold or silver. The range of varying values for these banknotes was perhaps from one string of cash to one hundred at the most. Ever since 1107, the government printed money in no less than six ink colors and printed notes with intricate designs and sometimes even with mixture of unique fiber in the paper to avoid counterfeit
Counterfeit

A counterfeit is an imitation made usually with the intent to deceptively represent its content or origins, thus increasing sales appeal due to the reputation of the imitated product....
ing.

The subsequent Yuan
Yuan Dynasty

The Yuan Dynasty , or Great Yuan Empire was both the continuation of the Mongol Empire and the Mongol founded historical state in Mongolia and China, lasting officially from 1271 to 1368....
, Ming
Ming Dynasty

The Ming Dynasty , or Empire of the Great Ming , was the ruling Dynasties in Chinese history of China from 1368 to 1644, following the collapse of the Mongol-led Yuan Dynasty....
, and Qing
Qing Dynasty

The Qing Dynasty , also known as the Manchu Dynasty, followed the Ming Dynasty in History of China, and was the last ruling Chinese Dynasties of China, ruling from 1644 to 1912 ....
 dynasties would issue their own paper money as well. Even the Southern Song's contemporary of the Jin Dynasty to the north caught on to this trend and issued their own paper money. At the archeological dig at Jehol
Rehe

Rehe , also known as Jehol, is a defunct China provinces of China ....
 there was a printing plate found that dated to the year 1214, which produced notes that measured 10 cm by 19 cm in size and were worth a hundred strings of 80 cash coins. This Jurchen
Jurchens

The Jurchens were a Tungusic peoples who inhabited the region of Manchuria until the 17th century, when they adopted the name Manchu. They established the Jin Dynasty between 1115 and 1122; it lasted until 1234 when the Mongols arrived....
-Jin issued paper money bore a serial number
Serial number

A serial number is a unique number assigned for identification which varies from its successor or predecessor by a fixed discrete integer value....
, the number of the series, and a warning label that counterfeiters would be decapitated, and the denouncer rewarded with three hundred strings of cash.

Urban employment and businesses

Within the cities there were a multitude of professions and places of work to choose from, if one weren't strictly inheriting a profession of his paternal line. Sinologist historians are fortunate enough to have a wide variety of written sources describing minute details about each location and the businesses within the cities of Song China. For example, in the alleys and avenues around the East Gate of the Xiangguo Temple in Kaifeng, historian Stephen H. West quotes one source:

Along the Temple Eastgate Avenue...are to be found shops specializing in cloth caps with pointed tails, belts and waiststraps, books, caps and flowers as well as the vegetarian tea meal of the Ding family...South of the temple are the brothels of Manager's Alley...The nuns and the brocade workers live in Embroidery Alley...On the north is Small Sweetwater Alley...There are a particularly large number of Southern restaurants inside the alley, as well as a plethora of brothels.


Similarly, in the "Pleasure District" along the Horse Guild Avenue, near a Zoroastrian temple
Zoroastrianism

Zoroastrianism is the religion and philosophy based on the teachings ascribed to the prophet Zoroaster, after whom the religion is named. The term Zoroastrianism is in general usage, essentially synonymous with Mazdaism, i.e., the worship of Ahura Mazda, exalted by Zoroaster as the supreme divine authority....
 in Kaifeng, West quotes the same source, Dongjing meng Hua lu:

In addition to the household gates and shops that line the two sides of New Fengqiu Gate Street...military encampments of the various brigades and columns [of the Imperial Guard] are situated in facing pairs along approximately ten li of the approach to the gate. Other wards, alleys, and confined open spaces crisscross the area, numbering in the tens of thousands—none knows their real number. In every single place, the gates are squeezed up against each other, each with its own tea wards, wineshops, stages, and food and drink. Normally the small business households of the marketplace simply purchase [prepared] food and drink at food stores; they do not cook at home. For northern food there are the Shi Feng style dried meat cubes...made of various stewed items...for southern food, the House of Jin at Temple Bridge...and the House of Zhou at Ninebends...are acknowledged to be the finest. The night markets close after the third watch only to reopen at the fifth.


West points out that Kaifeng shopkeepers rarely had time to eat at home, so they chose to go out and eat at a variety of places such as restaurants, temples, and food stalls. Restaurant businesses thrived
Culture of the Song Dynasty

The Song Dynasty was a culturally-rich and sophisticated age for China. There was blossoming of and advancements in the visual arts, music, literature, and philosophy....
 on this new clientele, while restaurants that catered to regional cooking targeted customers such as merchants and officials who came from regions of China where cuisine styles and flavors were drastically different than those commonly served in the capital. The pleasure district mentioned above—where stunts, games, theatrical stage performances, taverns and singing girl houses were located—was teeming with food stalls where business could be had virtually all night. West makes a direct connection between the success of the theatre industry and the food industry in the cities. Of the fifty some theatres within the pleasure districts of Kaifeng, four of these could entertain audiences of several thousand each, drawing huge crowds which would then give nearby businesses an enormous potential customer base. Besides food, traders in eagles and hawks, precious paintings
Culture of the Song Dynasty

The Song Dynasty was a culturally-rich and sophisticated age for China. There was blossoming of and advancements in the visual arts, music, literature, and philosophy....
, as well as shops selling bolts of silk and cloth, jewelry of pearls, jade
Chinese jade

Chinese jade is any of the carved-jade objects produced in China from the Neolithic Period onward. The Chinese regarded carved-jade objects as intrinsically valuable, and they metaphorically equated jade with human virtues because of its hardness, durability, and beauty....
, rhinocerous horn, gold and silver, hair ornaments, combs, caps, scarves, and aromatic incense thrived in the marketplaces.

Foreign Trade

The Song Dynasty actively promoted overseas trade. About fifty countries carried out overseas trade with the Song Dynasty, among them Ceylon, Langkasuka
Langkasuka

Langkasuka was an ancient Hinduism Malay people kingdom located in the Malay Peninsula. Another possible source of its name could be the combination of ....
,Mait
Mait

MAIT ...
, Samboja
Srivijaya

Srivijaya or Sriwijaya was an ancient Malays kingdom on the island of Sumatra, Southeast Asia which influenced much of the Malay Archipelago. The earliest solid proof of its existence dates from the 7th century; a Chinese monk, I-Tsing, wrote that he visited Srivijaya in 671 for 6 months....
, Borneo
Borneo

Borneo is the List of islands by area and is located at the centre of Maritime Southeast Asia. Administratively, this island is divided between Indonesia, Malaysia and Brunei....
, Kelantan
Kelantan

Kelantan is a state of Malaysia. The capital and royal seat is Kota Bharu. The Arabic honorific of the state is Darul Naim, .Kelantan is positioned in the north-east of Peninsular Malaysia....
, Champa
Champa

File:Shiva Dong Duong Style.jpgFile:VietnamChampa1.gifThe kingdom of Champa was an Indianized kingdom of Malayo-Polynesian origins and controlled what is now southern and central Vietnam from approximately the 7th century through to 1832....
, Chenla
Chenla

Chenla , known as Zhenla in Chinese language and Ch?n L?p in Vietnamese language, was an early Khmer people kingdom.At first a vassal state to Funan , over the next 60 years it achieved its independence and eventually conquered all of Funan, absorbing its people and culture....
, Bengtrao, Java
Java

Java is an island of Indonesia and the site of its Capital city, Jakarta. Once the centre of powerful Hindu kingdoms, The spread of Islam in Indonesia , and the core of the colonial Dutch East Indies, Java now plays a dominant role in the economic and political life of Indonesia....
, India
India

India, officially the Republic of India , is a country in South Asia. It is the List of countries and outlying territories by total area country by geographical area, the List of countries by population country, and the most populous liberal democracy in the world....
, Calicut, Lambri, Bengal
Bengal

Bengal , is a historical and geographical region in the northeast of South Asia. Today it is mainly divided between the independent sovereign nation of the Bangladesh and the state of West Bengal in India, although some regions of the previous kingdoms of Bengal are now part of the neighboring Indian states of Bihar, Assam, Tripura and Oris...
, Kurum, Gujara, Mecca
Mecca

Mecca , also spelled Makkah , Makka is a city in Saudi Arabia. Home to the Masjid al-Haram, it is the holy city in Islam and plays an important role in the faith....
, Misr
MISR

MISR is a scientific instrument on the Terra satellite launched by NASA on December 18, 1999. The device is designed to measure the solar radiation reflected by the Earth system in various directions and spectral bands; it became operational in February 2000....
, Bagdad
Bagdad

Bagdad can mean:* Baghdad, the capital city of Iraq* Bagdad , a 1949 American motion picture* Bagdad , a 1924 song by Jack Yellen and Milton Ager...
, Iraq
Iraq

Iraq , officially the Republic of Iraq , is a country in Western Asia spanning most of the northwestern end of the Zagros Mountains, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....
, Aman
Aman

Aman is the name of a location in J. R. R. Tolkien's legendarium, also known as the Undying Lands or Blessed Realm.It was a continent that lay to the west of Middle-earth across the great ocean Belegaer, although it lay in another dimension during the time of The Lord of the Rings....
, Almoravid dynasty, Sicily
Sicily

Sicily is an Autonomous regions with special statute of Italy. Of all the regions of Italy, Sicily covers the largest land area at 25,708 km? and currently has just over five million inhabitants....
, Morroco,Tanzania, Somali, Ryukyu, Korea
Korea

Korea is a geographic area composed of two sovereign countries, a civilization, and a former state situated on the Korean Peninsula in East Asia....
, and Japan
Japan

Japan is an island country in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, People's Republic of China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south....
. Pearls, ivory, rhinocero horns, frankincense, agalloch eaglewood, coral, agate, hawksbill turtle shell, gardenia, and rose were imported from the Arabs and Samboja, herbal medicine from Java, costusroot from Foloan (Kuala Sungai Berang) cotton cloth, cotton yarn from Mait, and ginseng, silver, copper, and quick silver from Korea.

To promote overseas trade and maximize government profits in control of imported goods, in 971 the government established a Maritine Trade Supervisorate at Guangzhou, in 999 established a second one at Hangzhou
Hangzhou

is a sub-provincial city located in the Yangtze River Delta in the People's Republic of China, and the capital of Zhejiang Provinces of China....
, a third at Mingzhou (now Ningbo
Ningbo

Ningbo is a seaport with sub-provincial city. The city has a population of 2,182,000 and is situated in northeastern Zhejiang province of China, People's Republic of China....
 city), followed by Quanzhou
Quanzhou

Quanzhou is a prefecture-level city in southeastern Fujian province of China, People's Republic of China. It borders all other prefecture-level cities in Fujian but two and faces the Taiwan Strait....
(Zaitung) in 1079, Huating County(now part of Shanghai
Shanghai

Shanghai is the List of cities in the People's Republic of China by population in China and one of the List of metropolitan areas by population in the world, with over 20 million people....
) in 1113, and Jiangyin
Jiangyin

Jiangyin is a city in China Jiangsu on the Yangtze River. It has an urban area population of 110,400 . The total GDP reached RMB 119 billion yuan in 2007, an increase of 17.9% from 2006....
 in 1145. Initially the Maritime Trade Supervisorate was subordinate under the Department of Transportation or prefecture official, later made into a separate agency with its own supervisor. The roles of the Maritime Trade Supervisorate included:

  • Taxation of imported goods, tax rate varied over the Song Dynasty, from 10% to as high as 40%; however, during the reign of Emperor Shenzong (1048 – 1085), the tax rate for imports was lowered to 6.67%. The tax was goods in kind, not money.


  • Government purchase and sale of imported goods. In 976, all imported goods from overseas merchants had to be sold only to the government, private sales was prohibited, penalty for violation depended on the quantity of goods involved, and the highest penalty was tattooing of the face and forced labor. Later the 100% rule was relaxed somewhat. The Maritime Trade Superisorate purchased a portion of the finest quality goods, for example 60% for pearls, 40% for rhinocero horn; the low quality leftover goods were allowed to be traded in the market. The purchase rate applied to after tax goods, then paid in money, not according to market price, but according to a government-accessed "fare value". In the Southern Song Dynasty, the Maritime Trade Supervisorates were short of funds and were not paid on time, causing huge losses in profits for overseas merchants; the volume of incoming ships also dropped.


  • Issue foreign trade permits for local merchants.


See also

  • Architecture of the Song Dynasty
    Architecture of the Song Dynasty

    The architecture of the Song Dynasty was based upon the accomplishments of its predecessors, much like every subsequent Chinese dynasty period of China....
  • Culture of the Song Dynasty
    Culture of the Song Dynasty

    The Song Dynasty was a culturally-rich and sophisticated age for China. There was blossoming of and advancements in the visual arts, music, literature, and philosophy....
  • History of the Song Dynasty
    History of the Song Dynasty

    The Song Dynasty of China was a ruling dynasty that controlled China proper and southern China from the middle of the 10th century into the last quarter of the 13th century....
  • Society of the Song Dynasty
    Society of the Song Dynasty

    China society during the Song Dynasty was marked by political and legal reforms, a philosophical revival of Confucianism, and the development of cities beyond administrative purposes into centers of trade, industry, and Maritime history commerce....
  • Technology of the Song Dynasty
    Technology of the Song Dynasty

    The Song Dynasty provided some of the most significant technology advances in History of China, many of which came from talented statesmen drafted by the government through imperial examinations....
  • History of economics
  • History of banking in China
    History of banking in China

    The history of banking in China includes the business of dealing with money and credit transactions in China....


External links