Leadership and Resources: Money - China Currency Historical

Money - Chinese Indonesia Way of Thinking - Historical view

Money - Historically

First recorded currency or barter is "kerang laut" or shell or pei dated 1100 BC, size about 3.4 cm during Shang Dinasty , the invention of barter from material "bone and stone" coins then continued. The most often quoted example of primitive money is shells - pei in chinese- The small cowrie shell, deriving from the Maldive Islands in the Indian Ocean, is a treasured item in the civilizations of China and India from very early times. From India these attractive objects are carried along the trade routes to Africa.

At the end of the Shang Dynasty, northerners civilization in China found it was hard to find enough shells from the south, so they used other materials like pottery, stone, bone, jade, bronze and gold to make shell-shaped money. The unit is peng, which has evolved to mean "friend". Friend is our fortune indeed! There is no agreement on how many clustered shells a peng include. A cluster of 10 shell makes one peng, the commonly held standard unit.

Shell (bei) is an important character component in Chinese Thinking. Almost all things or acts concerning money have the component of shell or pei, such as fortune, poverty, goods, trade, businessman, tribute, greed, expense, compensation, ransom, expensive (as well as noble), and cheap (as well as humble). People like to call their dear children or pets bao bei, or more sweetly bao bao or bei bei, which literally means treasure, and implies to honey or darling.

Only 4 left in stock

Customs gold units

Customs Gold Units (關金圓, pinyin: guānjīnyuán) were issued by the Central Bank of China to facilitate payment of duties on imported goods. Unlike the National Currency which suffered from hyperinflation, the CGUs were pegged to the U.S. Dollar at 1 CGU = US$0.40.

Unfortunately, the peg was removed in 1935 and the bank allowed CGUs to be released for general use. Already awash with excessive paper currency, the CGUs only added to rampant hyperinflation.

1945–1948

After the defeat of Japan in 1945, the Central Bank of China issued a separate currency in the northeast to replace those issued by puppet banks. Termed "東北九省流通券" (pinyin:Dōngběi jiǔ shěng liútōngquàn), it was worth approximately 10 times more than fǎbì circulating elsewhere. It was replaced in 1948 by the Gold Yuan. Northeastern Provinces Yuan was an attempt to isolate certain regions of China from the hyperinflation that plagued the fǎbì currency.

Gold Yuan

The onset of World War II saw a sharp devaluation of the fǎbì currency. This was largely due to unrestrained issuance of the currency to fund the war effort. After the defeat of Japan and the return of the Kuomintang Central Government, a further reform was instituted in August 1948 in response to hyperinflation. The Gold Yuan Certificate replaced the fǎbì at the rate of 1 Gold Yuan = 3 million Yuan fǎbì = US$0.25. The Gold Yuan was nominally set at 0.22217g of gold. However, the currency was never actually backed by gold and hyperinflation continued. Currently 19 June 2015, 1 Yuan = US$ 0.16

Paper money in China: 10th - 15th century
Paper money is first experimented with in China in about 910, during the Five Dynasties period. It is a familiar currency by the end of the century under the Song dynasty. Another three centuries later it is one of the things about China which most astonishes Marco Polo

Chinese Invention of paper money

Paper fabrication during the Han Dynasty (206 BC – 220 AD)

During the Tang Dynasty (618-907) there was a growing need of metallic currency, but thanks to the familiarity with the idea of credit the Chinese were ready to accept pieces of paper or paper drafts. This practice is derived from the credit notes used by merchants for their long-distance trade.

Due to this lack of coins, also the dead had to change their habits of taking a coin with them to pay their passage to the other world. About the 6th century notes replaced coins as burial money. May we consider this as a real means of payment? Of course not, but it is remarkable that also here paper replaces very smoothly the copper coins that were used before.

At the end of the Tang period, traders deposited their values with their corporations. In exchange, they received bearer notes or the so-called hequan. Those hequan were a real success and the idea was exploited by the Authorities. Merchants were invited to deposit henceforth their metallic money in the Government Treasury in exchange for official “compensation notes”, called Fey-thsian or flying money.

During the Song Dynasty (960-1276) booming business in the region of Tchetchuan likewise resulted in a shortage of copper money. Some merchants issued private drafts covered by a monetary reserve which initially consisted of coins and salt, later of gold and silver. Those notes are considered to be the first to circulate as legal tender. In 1024 the Authorities confer themselves the issuing monopoly and under Mongol government, during the Yuan Dynasty (1279-1367), paper money becomes the only legal tender. During the Ming Dynasty (1368-1644) the issuing of notes is conferred to the Ministry of Finance.