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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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