The economy of the

Ming dynasty The Ming dynasty, officially the Great Ming, was an Dynasties of China, imperial dynasty of China that ruled from 1368 to 1644, following the collapse of the Mongol Empire, Mongol-led Yuan dynasty. The Ming was the last imperial dynasty of ...

(1368–1644) of

China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...

was one of the largest in the world during that period. It is regarded as one of China's three major golden ages (the other two being the Han and Tang periods). The period was marked by the increasing political influence of the

merchant A merchant is a person who trades in goods produced by other people, especially one who trades with foreign countries. Merchants have been known for as long as humans have engaged in trade and commerce. Merchants and merchant networks operated i ...

s, the gradual weakening of imperial rule, and

technological Technology is the application of conceptual knowledge to achieve practical goals, especially in a reproducible way. The word ''technology'' can also mean the products resulting from such efforts, including both tangible tools such as ute ...

advances.

Currency

The early

attempted to use

paper currency Paper money, often referred to as a note or a bill (North American English), is a type of negotiable promissory note that is payable to the bearer on demand, making it a form of currency. The main types of paper money are government notes, which ...

, with outflows of

bullion Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes from ...

limited by its ban on private foreign commerce. Like its forebears, the currency experienced massive

counterfeit A counterfeit is a fake or unauthorized replica of a genuine product, such as money, documents, designer items, or other valuable goods. Counterfeiting generally involves creating an imitation of a genuine item that closely resembles the original ...

ing and

hyperinflation In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real versus nominal value (economics), real value of the local currency, as the prices of all goods increase. This causes people to minimiz ...

. (In 1425, Ming notes were trading at about 1.4% 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

and measured in

tael Tael ( ),"Tael" entry
at the

sycee A sycee (;.. from Cantonese , zh, j=Sai3 Si1, y=sai-sī, ). or yuanbao ( zh, t= 元寶, s= 元宝, poj=Goân-pó, j=jyun4 bou2, p=yuánbǎo, l=primary treasure, first=t) was a type of gold and silver ingot currency used in imperial China from ...

" first came into use in

Guangdong ) means "wide" or "vast", and has been associated with the region since the creation of Guang Prefecture in AD 226. The name "''Guang''" ultimately came from Guangxin ( zh, labels=no, first=t, t= , s=广信), an outpost established in Han dynasty ...

, 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 In trade, barter (derived from ''bareter'') is a system of exchange (economics), exchange in which participants in a financial transaction, transaction directly exchange good (economics), goods or service (economics), services for other goods ...

. The problem was met through smuggled, then legal, importation of Japanese silver (mostly through the Portuguese and Dutch) and Spanish silver from

Potosí Potosí, known as Villa Imperial de Potosí in the colonial period, is the capital city and a municipality of the Potosí Department, Department of Potosí in Bolivia. It is one of the list of highest cities in the world, highest cities in the wo ...

carried on the

Manila galleons The Manila galleon (; ) refers to the Spanish trading ships that linked the Philippines in the Spanish East Indies to Mexico (New Spain), across the Pacific Ocean. The ships made one or two round-trip voyages per year between the ports of Man ...

. Provincial taxes were required to be paid in silver in 1465; the salt tax, in 1475; and

corvée Corvée () is a form of unpaid forced labour that is intermittent in nature, lasting for limited periods of time, typically only a certain number of days' work each year. Statute labour is a corvée imposed by a state (polity), state for the ...

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

tael Tael ( ),"Tael" entry
at the

Spanish South America The Spanish Empire, sometimes referred to as the Hispanic Monarchy (political entity), Hispanic Monarchy or the Catholic Monarchy, was a colonial empire that existed between 1492 and 1976. In conjunction with the Portuguese Empire, it ushered ...

and China at about the same time the new

Tokugawa shogunate The Tokugawa shogunate, also known as the was the military government of Japan during the Edo period from 1603 to 1868. The Tokugawa shogunate was established by Tokugawa Ieyasu after victory at the Battle of Sekigahara, ending the civil wars ...

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 Li Zicheng (22 September 1606 – 1645), born Li Hongji, also known by his nickname, the Thunder King, was a Chinese Late Ming peasant rebellions, peasant rebel leader who helped overthrow the Ming dynasty in April 1644 and ruled over northe ...

's rebellion.

Manufactures

Privatization

Another key feature of the Ming manufacturing industry was

privatization Privatization (rendered privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation w ...

. Unlike the

Song A song is a musical composition performed by the human voice. The voice often carries the melody (a series of distinct and fixed pitches) using patterns of sound and silence. Songs have a structure, such as the common ABA form, and are usu ...

, in which state-owned enterprises played a large role, the Ming reverted to the old laissez faire policies of the Han by privatizing the salt and tea industries. By the middle of the Ming dynasty, powerful groups of wealthy merchants had replaced the state as the dominant movers behind Chinese industry.

Emergence of wage labor

The Ming government abolished the mandatory forced labor by peasants used in early dynasties and replaced it with

wage labor Wage labour (also wage labor in American English), usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under ...

. A new class of wage laborers sprung up where none had existed before. In Jingde alone, it was reported that there were no less than 300 pottery factories, all operated by wage laborers.Li Bo, Zheng Yin, "5000 years of Chinese history", Inner Mongolian People's publishing corp, 2001, , pp. 994–997.

Early encouragement of agriculture under Hongwu Emperor

In order to recover from the wars during the late

Yuan dynasty The Yuan dynasty ( ; zh, c=元朝, p=Yuáncháo), officially the Great Yuan (; Mongolian language, Mongolian: , , literally 'Great Yuan State'), was a Mongol-led imperial dynasty of China and a successor state to the Mongol Empire after Div ...

, the

Hongwu Emperor The Hongwu Emperor (21 October 1328– 24 June 1398), also known by his temple name as the Emperor Taizu of Ming, personal name Zhu Yuanzhang, courtesy name Guorui, was the List of emperors of the Ming dynasty, founding emperor of the Ming dyna ...

enacted pro-agricultural policies. The state invested extensively in agricultural canals, reduced taxes on agriculture to 1/30 of the output, and later to 1.5% of agricultural output. Ming farmers also introduced many innovations such as water-powered plows, and new agricultural methods such as crop rotation. This led to a massive agricultural surplus that became the basis of a market economy.

Emergence of commercial plantations

The Ming saw the rise of commercial plantations who produced crops suitable to their regions. Tea, fruits, paint and other goods were produced on a massive scale by these agricultural plantations. Regional patterns of production established during this period continued into the Qing dynasty. The

Columbian exchange The Columbian exchange, also known as the Columbian interchange, was the widespread transfer of plants, animals, and diseases between the New World (the Americas) in the Western Hemisphere, and the Old World (Afro-Eurasia) in the Eastern Hemis ...

brought crops such as

corn Maize (; ''Zea mays''), also known as corn in North American English, is a tall stout Poaceae, grass that produces cereal grain. It was domesticated by indigenous peoples of Mexico, indigenous peoples in southern Mexico about 9,000 years ago ...

with these foreign crops. During the, specialized areas also popped up planting large numbers of cash crops that could be sold at markets. Large numbers of peasants abandoned the land to become artisans. The population of the Ming boomed; estimates for the population of the Ming range from 160 to 200 million.

Rural markets during the Ming

Ming agriculture was much changed from the earlier areas; firstly, gigantic areas, devoting and specializing in cash crops, sprung up to demand from the new market economy. Secondly, agricultural tools and carts, some water-powered, help to create a gigantic agricultural surplus which formed the basis of the rural economy. Besides rice, other crops were grown on a large scale. Although images of autarkic farmers who had no connection to the rest of China may have some merit for the earlier Han and T'ang dynasties, this was certainly not the case for the Ming dynasty. During the Ming dynasty, the increase in population and the decrease in quality land made it necessary that farmers make a living off cash crops. Many of these markets appeared in the rural countryside, where goods were exchanged and bartered.Twitchett, Denis; John K.Fairbank. the Ming dynasty part 2 (May 1987), The Cambridge History of China, , pp. 497–498. A second type of market that developed in China was the urban-rural type, in which rural goods were sold to urban dwellers. This was particular the case when landlords decided to reside in the cities, and use income coming from rural land holding to facilitate exchange in the cities. Another way this type of market was used was professional merchants who bought rural goods in large quantities. The third type of market was the "national market" which was developed during the Song dynasty but particularly enhanced during the Ming. This market involved not only the exchange described above, but also products produced directly for the market. Unlike earlier dynasties, many Ming peasants were no longer producing only products they needed; many of them produced products for the market, which then they sold at a profit.

Trade and investment

In the early Ming, after the devastation of the war which expelled the Mongols, the

imposed severe restrictions on trade (the "''haijin''"). Believing that agriculture was the basis of the economy, Hongwu favored that industry over all else, including that of merchants. After his death, most of his policies were reversed by his successors. By the late Ming, the state was losing power to the very merchants which Hongwu had wanted to restrict. The Ming dynasty also engaged in a thriving trade with both Europe and Japan. The amount of silver flowing into the Ming dynasty was estimated by Joseph Needham at 300 million taels/10,500 metric tonnes, which is equivalent to more than 190 billion dollars in today's money. In addition to silver, the Ming also imported many European firearms, in order to ensure the modernness of their weapons. Trade and commerce thrived in this liberalized economy, and was aided by the construction of

canal Canals or artificial waterways are waterways or engineered channels built for drainage management (e.g. flood control and irrigation) or for conveyancing water transport vehicles (e.g. water taxi). They carry free, calm surface ...

road A road is a thoroughfare used primarily for movement of traffic. Roads differ from streets, whose primary use is local access. They also differ from stroads, which combine the features of streets and roads. Most modern roads are paved. Th ...

s, and

bridge A bridge is a structure built to Span (engineering), span a physical obstacle (such as a body of water, valley, road, or railway) without blocking the path underneath. It is constructed for the purpose of providing passage over the obstacle, whi ...

s by the Ming government. The Ming saw the rise of several merchant clans such as the Huai and Jin clans, who disposed of large amounts of wealth. The

gentry Gentry (from Old French , from ) are "well-born, genteel and well-bred people" of high social class, especially in the past. ''Gentry'', in its widest connotation, refers to people of good social position connected to Landed property, landed es ...

and merchant classes started to fuse, and the merchants gained power at the expense of the state. Some merchants were reputed to have a treasure of 30 million taels. China acted as the cog running the wheel of global trade. Trade with Japan continued unobstructed despite the embargo, through Chinese smugglers, Southeast Asian ports, or Portuguese. China was entirely integrated in the world trading system. European nations had a great desire for Chinese goods such as

silk Silk is a natural fiber, natural protein fiber, some forms of which can be weaving, woven into textiles. The protein fiber of silk is composed mainly of fibroin and is most commonly produced by certain insect larvae to form cocoon (silk), c ...

and

porcelain Porcelain (), also called china, is a ceramic material made by heating Industrial mineral, raw materials, generally including kaolinite, in a kiln to temperatures between . The greater strength and translucence of porcelain, relative to oth ...

. The Europeans did not have any goods or commodities which China desired, so they traded silver to make up for their trade deficit. Spaniards at the time of the

Age of Exploration The Age of Discovery (), also known as the Age of Exploration, was part of the early modern period and overlapped with the Age of Sail. It was a period from approximately the 15th to the 17th century, during which Seamanship, seafarers fro ...

discovered vast amounts of silver, much of which was from the

silver mines, to fuel their trade economy. Spanish American silver mines were the world's cheapest sources of it, producing 40,000 tons of silver in 200 years. The ultimate destination for the mass amounts of silver produced in the Americas and Japan was China. From 1500 to 1800, Mexico and Peru produced about 80% of the world's silver with 30% of it eventually ending up in China. In the late 16th and early 17th century, Japan was also exporting silver heavily into China. Silver from the Americas flowed mostly across the Atlantic and made its way to the far east. Major outposts for the silver trade were located in Southeast Asian countries, such as the Philippines. The city of Manila served as a primary outpost of the exchange of goods between the Americas, Japan, Indian, Indonesia and China. However, there was a large amount of silver that crossed across the Pacific Ocean directly from the Americas as well. Trade with

Ming China The Ming dynasty, officially the Great Ming, was an Dynasties of China, imperial dynasty of China that ruled from 1368 to 1644, following the collapse of the Mongol Empire, Mongol-led Yuan dynasty. The Ming was the last imperial dynasty of ...

via Manila served a major source of revenue for the

Spanish Empire The Spanish Empire, sometimes referred to as the Hispanic Monarchy (political entity), Hispanic Monarchy or the Catholic Monarchy, was a colonial empire that existed between 1492 and 1976. In conjunction with the Portuguese Empire, it ushered ...

and as a fundamental source of income for Spanish colonists in the Philippine Islands. Until 1593, two or more ships would set sail annually from each port. The galleon trade was supplied by merchants largely from port areas of

Fujian Fujian is a provinces of China, province in East China, southeastern China. Fujian is bordered by Zhejiang to the north, Jiangxi to the west, Guangdong to the south, and the Taiwan Strait to the east. Its capital is Fuzhou and its largest prefe ...

who traveled to Manila to sell the Spaniards spices,

ivory Ivory is a hard, white material from the tusks (traditionally from elephants) and Tooth, teeth of animals, that consists mainly of dentine, one of the physical structures of teeth and tusks. The chemical structure of the teeth and tusks of mamm ...

lacquerware Lacquerware are objects decoratively covered with lacquer. Lacquerware includes small or large containers, tableware, a variety of small objects carried by people, and larger objects such as furniture and even coffins painted with lacquer. Before ...

, processed

cloth and other valuable commodities. Cargoes varied from one voyage to another but often included goods from all over Asia - jade, wax, gunpowder and silk from China; amber, cotton and rugs from India; spices from Indonesia and Malaysia; and a variety of goods from Japan, including fans, chests, screens and porcelain.

Taxation

Ming taxation was light. Taxes on agriculture were only 1/30 of agricultural produce, and were later reduced to 1/50 of produce. Taxes on commerce amounted to 1/30 of commerce also, but was later reduced to 1.5%. These low taxes spurred trade, but severely weakened the state. Salt, as in earlier dynasties, was an important source of state revenue, but required constant and competent management. With the coming of the

Little Ice Age The Little Ice Age (LIA) was a period of regional cooling, particularly pronounced in the North Atlantic region. It was not a true ice age of global extent. The term was introduced into scientific literature by François E. Matthes in 1939. Mat ...

in the 17th century, the state's low revenues and its inability to raise taxes caused massive deficits, and large numbers of Ming troops defected or rebelled because they had not been paid.

Weakening of the state

During the Ming, the controls imposed on the economy were gradually relaxed.

State monopolies In economics, a government monopoly or public monopoly is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law. It is a monopo ...

salt In common usage, salt is a mineral composed primarily of sodium chloride (NaCl). When used in food, especially in granulated form, it is more formally called table salt. In the form of a natural crystalline mineral, salt is also known as r ...

and iron ended as these and other industries were privatized. Taxes were reduced from the high levels under the Mongol Yuan, and the Ming had one of the lowest tax rates (per person) in the world. The entire foreign trade, which was estimated at up to 300 million taels, provided the Ming with a tax of only about 40,000 taels a year. When the

Wanli Emperor The Wanli Emperor (4 September 1563 – 18 August 1620), also known by his temple name as the Emperor Shenzong of Ming, personal name Zhu Yijun, art name Yuzhai, was the 14th List of emperors of the Ming dynasty, emperor of the Ming dynasty, reig ...

sought to increase the salt tax, his measures were opposed by violence and the eunuchs he sent to collect the tax were beheaded by local officials.

Sprouts of capitalism

Investment and capital moved off the land and were poured into ventures. Continuing the trend from the Song, Ming investors poured large amounts of capital into ventures and reaped high profits. Many Chinese scholars believe the Ming was the dynasty in which the " sprouts of capitalism" emerged in China, only to be suppressed by the Qing dynasty. This theory was widely promoted by Communist scholars during the Maoist period, and suffers from that period's general condemnation of the Manchu Qing, who were accused of mis-managing the Chinese state in the face of foreign encroachment.

References

External links

China’s GDP in the Ming Dynasty Guan Hanhui David Daokui Li
{{Economic history of China Ming dynasty Economic history of China Medieval economic history 16th century in economic history 17th century in economic history Ming