Ancient Currency

The first objects to be used as money by Chinese people were natural seashells. As goods began to be exchanged with increasing frequency, the supply of seashells often lagged behind the demand for them, and so imitation shell money began to be manufactured from various materials including stone, jade, bone, and copper. At the end of the Shang Dynasty, the bronze shell-shaped coins heralded the mintage of Chinese coin. It was a great leap forward in the evolution of Chinese currency. By the end of the Western Zhou Dynasty (c. 1100-771BC), somewhere between 1000 and 400BC, a more standardized form of metal currency was developed.

Known for its knife-like shape, "knife money" is the oldest form of hard currency in China. About seven inches in length, knife money had a hole in the middle blade, as well as hand-carved inscriptions that detailed the coin's origin and trading value. Like knife money, the term "spade money" is also derived from the shape of the coin. The prominent role of agriculture was eventually brought into play during the Warring States Period (c. 400 B.C.), which is reflected in the choice of the spade as the civilization's currency.

With the unification of China under the Qin Emperor Shihuang came a more standardized monetary system. Knife and spade shaped coins were replaced with the Emperor's half-liangs (Qin Ban Liao in Chinese).Liang is a Chinese measure unit. One half-liang weighs about 25 grams and is round in shape with a square hole in the middle. Each coin is further identified by the word "half liang" inscribed on one side, which was written by Minister Li Si, the originator of zhuan shu (seal character), a font of Chinese calligraphy. The coin's nickname, "Square Hole Brother", was also derived from its shape. Ban Liang coin can be said to have reached the foremost ideal of symmetry and balance. The round coin with a square hole in the center reflected the concept the round sky covering the square earth held by our ancestors. The round symbolizes heavenly commandment while the square symbolizes the authority of the emperor. Wherever the Ban Liang coins went, the prowess of the emperor would go. In summery, the unification of currency promoted the exchange of commodities and economic development.

In 118 B.C. Wu Zhu Qian (five zhu money) coin (Zhu is a Chinese measure unit) was made upon Emperor Wu Di's reformation. It had a value of 5 Zhu. Unlike the earlier half-liangs it had a raised rim to prevent filing. The coin proved quite popular, and continued to be issued in various versions for the next six centuries! This particular version was issued during the Western Han Dynasty, until it was overthrown by Wang Mang in 7 A.D.

The Kai Yuan coin (Kai Yuan Tong Bao in Chinese) was introduced by Chinese Emperor Gao Zu, who founded the Tang Dynasty in 618 A.D. The coins replaced the previously used Wu Zhu coin and other coins. The high quality of the coins and excellent calligraphy set a standard for Chinese coins for the next 1000 years! The character Kai Yuan Tong Bao on the coin was written by Ou Yang Xun, the top one among the four calligraphy masters in the Tang Dynasty. The legend on the coin, Kai Yuan Tong Bao translates as "precious currency of the Kai Yuan era". The Tang Dynasty was a brilliant period in Chinese history. It was an era of great prosperity and artistry. The Kai Yuan coin continued to be issued for the next 300 years, until the collapse of the Dynasty in 907 A.D. During the Tang Dynasty, China was the commercial centre of Asia. Kai Yuan Tong Bao was circulated in many countries that had close commercial tie with the Tang Dynasty.

China was the first country in the world to use paper currency -- Jiaozi. The history of Jiaozi dates back to the Northern Song Dynasty (960-1127). During this time, merchants in Chengdu distributed one of the earliest known paper money. The currency was called Jiaozi, a kind of printed-paper certificate, to replace the iron money. With the high circulation of the currency, the local government of Chengdu established the earliest administrative and savings bank known as the Office of Jiaozi. The word Jiaozi then began to be used as a general term for money. In 1023, the authority of the Song Dynasty issued official Jiaozi while banning private issuing. Jiaozi was the first paper money not only in China but also around the world. Paper money proved popular in the later dynasties like the Yuan (1271-1368), Ming (1368-1644), and Qing (1644-1911), but it had never replaced the metal coins in circulation. The round coins with square holes continued to be used in China for more than two thousand years, until the late Qing Dynasty. However, jiao zi occupies an important role in both the monetary development and the money printing history.

The heyday of Chinese ancient paper money came during the Yuan Dynasty. Throughout the dynasty, paper money was used and the concerned system was developed and perfected. Coins were also minted during this time. The name of Yuan Bao originated from the Yuan Dynasty. It had the meaning of the treasure of the Yuan and later referred to gold and silver money. The Ming Dynasty issued Da Ming Tong Xing Bao Chao (paper note circulating in the Ming Dynasty) and this was the only paper money during the whole dynasty, which was unprecedented in the previous dynasties. During the reign of Jia Jing by Emperor Shi Zong of Ming Dynasty, the mintage technique made a great progress. With the addition of zinc, brass coin emerged. Before this, all the coins were made of bronze. At the beginning of the Qing Dynasty, there was not issuance of paper money until 1651. This issuance lasted only ten years. In the late of the 19th century, foreign imperialist countries invaded China and set up banks and issued paper money. The Qing Dynasty set up mintage factory in Beijing in 1908 and the first steel money template was made during this time.