| Since modern times,with the disintegration of China’s natural economy,a commodity economy has gradually developed along the coast,along the rivers,in the heavy industrial and mining areas,and in the commercial ports with developed transportation.As a result of deepening imperialist aggression,China gradually degenerated into a semi-feudal version of a colonial society,with insufficient central authority and serious local secessionist forces.This was accompanied by a confused currency and a complicated financial system,which made economic development and communication difficult and was not conducive to the formation of a national market,let alone national unification.From the very beginning of the Nanjing Nationalist Government,it set out to study the reform of a unified currency system in order to achieve national unification.After Roosevelt came to power in 1933,under the pressure of the silver syndicate,the United States pursued a silver policy and raised the price of silver,causing an outflow of silver,deflation and the withering of all industries in China,which directly affected the Nationalist government’s tax revenue.In order to consolidate its occupation of the Northeast,it continued to invade and encroach on North China,threatening the fundamental rule of the Nationalist Government.The Nationalist government was forced to speed up the pace of fiat currency reform and made a technical exercise for it by abolishing the two taels and changing the yuan in 1933 and simplifying the currency system.Due to the combination of various reasons and the corresponding preparations made by the National Government to carry out the fiat currency reform,on 3 November 1935,the National Government formally implemented the fiat currency reform by implementing a series of content reform policies such as unifying the currency system,centralising the issuance of currency,implementing the state ownership of silver,abandoning the silver standard and implementing unlimited trading of fiat foreign exchange.The 1935 fiat currency reform was also of great significance in China’s financial history.It was a landmark event in China’s financial history,as it abandoned the outdated precious metal standard,centralised the issuance of currency,established a reserve for currency issuance,and promoted the construction of a central banking system,which began the process of modernising China’s currency.As the Nationalist government,after all,represented the interests of the large landowners,bourgeoisie and bureaucratic buyers,the fiat currency reform under its leadership inevitably had limitations,as demonstrated by the fact that the objectives of its fiat currency reform were not in line with the theoretical objectives of monetary policy,its reform programme and response measures maintained the stability of the external value of the fiat currency much more than the stability of prices,and its inability to afford a "dishonoured The most negative effect of these limitations is the inability to implement a "no cash" monetary policy and an "unrestricted" foreign exchange policy.The most negative effect of these limitations was the inability to prevent hyperinflation from occurring,which ultimately caused the fiat currency to lose its monetary function and collapse. |
