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7 - Money and the Macro-economy

from Part I - 1800–1950

Published online by Cambridge University Press:  07 February 2022

By
Dan Li  and
Hongzhong Yan
Edited by
Debin Ma  and
Richard von Glahn
Debin Ma
Affiliation:
Hitotsubashi University, Tokyo
Richard von Glahn
Affiliation:
University of California, Los Angeles
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Summary

An understanding of how the money market developed is vital because money serves as the blood of an economy. From 1800 to 1937, the Chinese money market transitioned from a highly fragmented bimetallic system to a gradually integrated silver yuan system in tandem with a silver-backed fiduciary paper-money system until a fiat money system was established. As a consequence, the economy became increasingly monetized as the growth rate of the money supply gradually surpassed the overall economic growth rate without evident inflation pressure on general price trends. This development resulted both from the efforts of governments and private institutions in response to various types of shock separately and from the outcomes of competition and co-operation between the two stakeholders over time.

Keywords

monetary systemmacroeconomyChinasilvercopperbimetallicbanknotesbankmarket integration
Type
Chapter
Information
The Cambridge Economic History of China , pp. 208 - 243
Publisher: Cambridge University Press
Print publication year: 2022

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References

Further Reading

Chang, K.-N., “Toward Modernization of China’s Currency and Banking, 1927–1937,” in Sih, P.K.T. (ed.), The Strenuous Decade: China’s Nation-Building Efforts, 1927–1937 (New York, St. John’s University Press 1970), pp. 129–65.Google Scholar
Cheng, L., Banking in Modern China: Entrepreneurs, Professional Managers, and the Development of Chinese Banks, 1897–1937 (Cambridge, Cambridge University Press, 2003).Google Scholar
Coble, P. M., The Shanghai Capitalists and the Nationalist Government, 1927–1937 (Cambridge, Harvard University Council on East Asian Studies, 1986).Google Scholar
Irigoin, A., “The End of a Silver Era: The Consequences of the Breakdown of the Spanish Peso Standard in China and the United States, 1780s–1850s,” Journal of World History 20.2 (2009), 207–44.Google Scholar
Ma, D., “Chinese Money and Monetary System, 1800–2000, Overview,” in Caprio, G. et al. (eds.), Handbook of Key Global Financial Markets, Institutions, and Infrastructure, vol. 1 (Oxford, Elsevier, 2012), pp. 57–64.Google Scholar
Ma, D., “Financial Revolution in Republican China during 1900–1937: A Survey and New Interpretation,” Australian Economic History Review, 2019, 242–62.Google Scholar
Xinwei, Peng 彭信威, 中国货币史 (Chinese Monetary History) (Shanghai, Shanghai People’s Publishing House, 1987; first published 1954).Google Scholar
Von Glahn, R., “Foreign Silver Coins in the Market Culture of Nineteenth-Century China,” International Journal of Asian Studies 4.1 (2007), 51–78.Google Scholar
Von Glahn, R., Fountain of Fortune: Money and Monetary Policy in China, 1000–1700 (Berkeley, University of California Press, 1996).Google Scholar
Yejian, Wang 王业键, 中国近代货币与银行的演进, 1644–1937 (The Evolution of Money and Banking in Modern China, 1644–1937) (Beijing, Institute of Economics, Academia Sinica, 1981).Google Scholar
Chengxi, Wu 吴承禧, 中国的银行 (The Chinese Banks) (Shanghai, The Commercial Press, 1934).Google Scholar
Jingping, Wu 吴景平, 上海金融业与国民政府关系研究, 1927–1937 (Research on the Relationship between the Shanghai Financial Industry and the Nationalist Government, 1927–1937) (Shanghai, Shanghai University of Finance and Economics Press, 2002).Google Scholar
Cangshui, Xu 徐沧水 (ed.), 中国今日之货币问题 (Monetary Issues in Today’s China) (Shanghai, Bankers’ Weekly Press, 1921).Google Scholar
Yan, Hongzhong, “Economic Growth and Fluctuation in the Early Qing Dynasty: From the Perspective of Monetary Circulation,” Frontiers of History in China 4.2 (2009), 221–64.Google Scholar
Hongzhong, Yan 燕红忠, “货币供给量、货币结构与中国经济趋势, 1650–1936” (Money Supply, Monetary Structure and Economic Development Trend in China, 1650–1936), Journal of Financial Research 7 (2011), 57–69.Google Scholar
Hongzhong, Yan 燕红忠, 中国的货币金融体系, 1600–1949 (The Monetary and Financial System in China, 1600–1949) (Beijing, China Renmin University Press, 2012).Google Scholar
Naiqi, Zhang 章乃器, 中国货币金融问题 (The Monetary and Financial Issue in China) (Shanghai, Shenghuo shudian, 1936).Google Scholar

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