Economy of the Ming dynasty

The economy of the Ming dynasty (1368-1644) of China was the largest in the world during that period. It is regarded as one of China's three golden ages (the other two being the Han and Song periods). The period was marked by the increasing political influence of the merchants, the gradual weakening of imperial rule, and technological advances.

The early Ming dynasty attempted to use paper currency, with outflows of bullion limited by its ban on private foreign commerce. Like its forebears, the currency experienced massive counterfeiting and hyperinflation. (In 1425, Ming notes were trading at about 0.014% of its original value under the Hongwu Emperor.) The notes remained in circulation as late as 1573 but their printing was ended in 1450. Minor coins were minted in base metals, but trade mostly occurred using silver ingots. As their purity and exact weight varied, they were treated as bullion and measured in tael. These privately-made "sycee" first came into use in Guangdong, spreading to the lower Yangtze sometime before 1423, the year it became acceptable for payment of tax obligations. In the mid-15th century, the paucity of circulating silver caused a monetary contraction and extensive reversion to barter. The problem was met through smuggled, then legal, importation of Japanese silver (mostly through the Portuguese and Dutch) and Spanish silver from Potosí carried on the Manila galleons. Provincial taxes were required to be paid in silver in 1465; the salt tax, in 1475; and corvée exemptions, in 1485. By the late Ming, the amount of silver being used was extraordinary: at a time when English traders considered tens of thousands of pounds an exceptional fortune, the Zheng clan of merchants regularly engaged in transactions valued at millions of taels. However, a second silver contraction occurred in the mid-17th century when King Philip IV began enforcing laws limiting direct trade between Spanish South America and China at about the same time the new Tokugawa shogunate in Japan restricted most of its foreign exports, cutting off Dutch and Portuguese access to its silver. The dramatic spike in silver's value in China made payment of taxes nearly impossible for most provinces.In extremis, the government even resumed use of paper currency amid Li Zicheng's rebellion.

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