China

Economy

The Mongol conquest of the Song empire had, for the first time since the end of the Tang, reunified all of China. Song China had traded with its neighbours, the Liao and the Jin, but trade had been strictly controlled and limited to authorized border markets. The Mongol conquest therefore reintegrated China’s economy. The Mongol administration, in its desire to utilize the resources of the former Song territory, the most prosperous part of China, tried to promote internal trade and aimed at a fuller integration of north and south. The region around the capital was dependent on grain transports from the south, and large quantities of food and textiles were needed to keep the Mongol garrisons. The Grand Canal, which had linked the river systems of the Yangtze, the Huai, and the Huang since the early 7th century, was repaired and extended to Dadu in 1292–93 with the use of corvée (unpaid labour) under the supervision of a distinguished Chinese astronomer and hydraulic engineer, Guo Shoujing—an action entirely within Chinese tradition. This was preceded, however, by another measure in the field of economic communications that was unorthodox in Chinese eyes: about 1280, concessions for grain transport overseas were granted to some private Chinese entrepreneurs from the southeastern coastal region (some Chinese government officials were traditionally antagonistic toward private trade and enterprise, an attitude that the ruling Mongols did not share). These private shipowners transported in their fleets grain from the lower Yangtze region to northern Chinese harbours and from there to the capital. Early in the 14th century, however, these private fleet owners, who had made huge fortunes, were accused of treason and piracy, and the whole action was abolished. The Mongol government never replaced them with government fleets.

Another factor that contributed to the flourishing internal trade in China was standardized currency. The Song and Jin had issued paper money but only in addition to bronze coins, which had remained the basic legal tender. The Yuan government was the first to make paper money the only legal currency throughout the empire (1260). This facilitated financial transactions in the private sector as well as in the state treasuries. As long as the economy as such remained productive, the reliance on paper money as the basic currency had no detrimental effects. Only when the economy began to disintegrate under the last Mongol ruler did the paper money become gradually valueless and inflation set in. One reason for the paper currency might have been that much bronze and copper was used for the Buddhist cult and its statues, another that metal ores in China proper were insufficient to supply enough coins for some 80 million people.