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The Formation of the Modern East Asian Economy
To put these imports in a proper perspective, remember that these official figures grossly underestimate the actual import of silver, that smuggling and corruption were rife, that the purchasing power of silver had roughly doubled between 1200 and 1600, and that during the nearly 300 years of the Ming dynasty, the official production of silver amounted to a mere (* p 13)

     A recent study estimates that China's silver imports added at least eight times more bullion to its coinage stock than did its domestic mines in the second half of the sixteenth century and perhaps 20 times more in the first half of the seventeenth century. In other words, the famous Single Whip tax reform of the sixteenth century, whereby all taxes came to be paid in silver, was possible only through China's dependence on foreign silver. When a Chinese merchant reported to the Beijing court that silver grew wild in the mountains of the Philippines and could be picked up off the ground like pebbles, even this arch-conservative court was spurred into sending and investigative expedition. No wonder a Spanish missionary in the late 1630s wrote of the Chinese that "silver is their lifeblood."

     The importance of this sixteenth and seventeenth century bullion and trade for this talk is threefold. It indicates the widespread replacement of copper coinage by silver in the Chinese markets. It shows the Ming government's repeated inability to satisfy its own currency needs. And it demonstrates the dependence of the Chinese government and economy on this foreign influx of silver to enforce its tax reforms and to fuel the remarkable commercial growth of the late sixteenth and early seventeenth centuries.

      Such interconnections survived and even flourished after a famous European decision in the 1630s. Alarmed at the inflationary impact of New World silver on his kingdom, Philip the Second of Spain halted the production of silver in Mexico and Peru and hence ceased its flow across the Pacific. Yet, contrary to what some Western scholars have written, the Japanese did not halt the outflow of silver at this time. In fact, China's imports of Japanese silver increased in the 1640s and 1650s. Thus, it is inaccurate to attribute the reputed loss of this silver both the fall of the Ming dynasty in 1644 and the collapse of the Chinese economy in the opening decades of the new Qing dynasty

     Time does not allow me to discuss in detail today the Qing currency system. Here I merely wish to note that its official copper and silver system was established only through ruthless methods of population and mining control and through the exploitation of copper mines in the far southwest of China. And even then, the size and scale of China defeated it.

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