Study On Silver Standard Monetary System In Ming And Qing Dynasties

In China, Silver has long been used as a kind of currency, but it had not been recognized aslegal tender until mid-Ming dynasty, and this status was terminated at the end of Qing dynasty andthe beginning of the Republic of China. In that special historical period, Silver served as thedominant currency for hundreds of years and created great prosperity. With silver as the dominantcurrency, the nation’s economy, trade and finance had achieved great prosperity. China in Ming andQing dynasties were even called as the Silver Empire by the West.From the perspective of historical development and inherent mechanism of the monetarysystem, this thesis analyzes inner factors and organization of the silver standard system. It reviewsthe whole historical process of the silver standard system, including background, establishment,development, evolution and reform failure, and discusses the development and decline ofinternational and domestic trade under this system. Furthermore, financial credit, financial system,financial business, form and break of financial network are analyzed, so that the international natureof the silver standard monetary system and its international impact on China’s finance are probed.On this basis, this thesis illustrates the system reform of the silver standard monetary system and thecauses of its failure. This thesis is divided into seven chapters. Chapter One introduces researchbackground, literature review, content and methodology of this thesis. Chapter Two illustratestheoretical and analytic framework. Chapter Three discusses historical formation and developmentof silver standard monetary system and its constituting factors and institutions. Chapter Fouranalyzes direct and indirect impacts of silver standard monetary system on economic and tradedevelopment. Chapter Five explores the features of international finance under the silver standardmonetary system. Chapter Six discusses the reform of silver standard monetary system. ChapterSeven presents the conclusion of this thesis.The significance of this thesis is as follows: First, it has a positive effect on clarifying the roleof silver standard monetary system in economic development of Ming and Qing dynasties. It helpsto answer why China’s development gradually lagged behind the West, which is a major historicalissue. Second, from the unique perspective of monetary system, this thesis renews the causes andhistorical nature of China’s traditional finance including exchange shops and old style Chinesebanks. Third, this thesis has a vital significance in exploring the relationship between silver standardmonetary system and international monetary system, trade between the East and the West, themechanism of international commodity flow, trade reversals and the collision between monetary systems of China and the West.By applying financial coordination theory as its theoretical basis, this thesis discusses thedevelopment of silver standard monetary system from the perspective of historical development andinstitutional change. It presents that the emergence and development of silver standard monetarysystem is the result of mutual coordination of China’s economic factors. Inherent factors of silverstandard monetary system coordinated with each other, the silver standard monetary systemcoordinated with financial credit, financial institutional structure, and financial business, and it alsocoordinated with international monetary system. Combining historical research and economic andfinancial study, this thesis mainly uses the general analysis method of western economic andfinancial theories, with textual research and inductive method of historical research as complement.Comprehensive research methods including statistical measurement, comparison between Chinaand the West and case study are utilized. As for narrative style, narration is interspersed withdiscussion and history is interspersed with analysis.From the study conducted in the first six chapters, this thesis first proposes that the emergenceand development of China’s silver standard monetary was the result of coordination of economicand financial factors. On the basis of this monetary system, China’s traditional financial system wasformed, i.e. a financial network centered on exchange shops and old style Chinese banks. After thepeak of development, this system declined along with the break up of the silver standard monetarysystem. Secondly, this thesis believes that before mid-19th century, the implementation of silverstandard monetary system greatly promoted China’s economic and trade development. However,after mid-19th century, defaults of the system impeded the development of economy and trade.Thirdly, by comparison of international monetary systems and their impacts on foreign trade, thisthesis holds that under the silver standard monetary system, the development mode of China’sfinance differed from the West. Besides, based on researches on prosperity and decline of thesystem, this thesis points out that monetary finance is essential to economic development, and thereform of monetary finance system should never lag behind social and economic advancement.China’s current reform should draw lessons from historical experiences, seize opportunities toimplement monetary and financial reforms, and provide better financial institutional environmentfor social and economic development, without being conservative, complacent and worshipingother countries. This is the practical significance of this thesis.Due to deficiencies in theoretical level and grasp of historical facts, the study of this thesis onthe overall view of economic development in Ming and Qing dynasties, international nature ofmonetary system, western monetary system, financial development is not thorough and specificenough. The unsolved questions left will be future research directions.