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The Formation of the Modern East Asian Economy
Once they entered circulation, these ingots became particularly popular with Arab merchants in the southern and southeastern coastal trade. In general, copper coins, then and later, were used for transactions involving commodities valued at less than 500 copper coins. For any more valuable transaction, silver, gold, money orders, promissory notes, and paper money were being commonly used by no later than the middle of the eleventh century.

Yet, in the 1070s, silver accounted for just 7.3% of the government's total cash revenues, compared to 80% for copper. Although no such figures survive from the next two centuries, the upsurge in long distance trade during the twelfth century surely must have made silver ingots an increasingly popular means of exchange for wholesale trade. The depreciation of Sung, Yuan, and Ming paper notes also must have increased silver's attractions. The Mongols had recognized this early on in their dynasty by setting up, for the first time in Chinese history a tax-a poll tax-to be paid exclusively in silver. In fact, by the 1350s, the collapse of their paper notes made the value of silver vis-à-vis gold greater than at any time in Chinese history. As I have already mentioned, in 1375 the Ming dynasty shut the nation's mines, but from 1378 to 1397 the value of silver, against the Ming's paper currency, rose tenfold. Only from the 1430s were land taxes payable in silver in some wealthy coastal prefectures and did the government tolerate silver in trade. Paradoxically, the conquest (* p 11) of silver was assured only after the Ming government closed down its mines in 1435, and for the next 70 years produced no coin in copper or any other metal. Its concern that mining and mintage costs were greater than the value of the coins produced ended up having a profound impact on its own economy and that of East Asia.

For silver would dominate copper in marketplaces in the more advanced market areas of the empire. In the late fourteenth century, copper coin had been commonly used only in the south, especially the southeast. A century later, it was used predominantly in the north, particularly along the Grand Canal corridor that linked the two capitals of Beijing and Najin. Elsewhere, commodity barter was still the preferred means of currency; furs functioned as a currency in the northwest province of Shanxi, and so did cowrie shells in the southwest province of Yunnan. Otherwise, Chinese markets relied on old Song and Tang dynasty coins as in the southeast provinces of Gwangdong and Fukien, on a mixture of grain, cloth, and silver as in Shaanxi (* p 11) and Jiangxi, or principally silver in the Lower Yangtze valley. Moneylending even in the countryside of that highly commercialized prefecture of Suzhou in the Lower Yangtze delta was often conducted no longer in grain or copper coin but in silver.

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