Chinese is one of the first people to use currency instead of real goods to conduct trade activities.
China’s Bronze Age Coins
The earliest currencies used by the Chinese were cowry shells or copies of the shells. In Chinese scripts, the characters associated with money or other valuable items normally have a radicle 贝 (貝), meaning shell.
These bronze money in the shape of shells were unearthed from a Shang Dynasty archaeological site in Shanxi Province, dating back to nearly 4,000 years ago.
Chinese coins used by Confucius
After the Shang, the shell-shaped currency was gradually out of fashion. In the late East Zhou Dynasty, the federation crumbled and each state became an independent kingdom issuing its own currency in its own preferred style.
This spade-shaped bronze currency was from the Lu Kingdom in today’s Shandong Province and was used by Confucius 2,500 years ago.
A United Currency System
Chinese coins of the Han Dynasty (202BC 0 220AD)
After China was reunited by the Qin Kingdom, First Emperor Qin declared Qin currency as the official currency for the entire country, along with one unified written language and standard width of the roads for horse-drawn vehicles that were normally running on railways.
The Qin currency is a round shape with a square hole in the middle, reflecting the structure of the universe. Ancient Chinese believed the earth is square while heaven is a semi-circle, like a dome covering the earth below.
The design also served a practical function. With the hole, the coins could be stringed together, which was not only convenient for people to carry the money around but also much easier to count the number of coins.
Ten coins were usually stringed as a unit, known as 串, meaning a string (of coins). The coin strings were often tied to the inner garment, hence it was also called 吊, meaning hanging.
Chinese coins remained in this fashion for the next 2,200 years until the 20th century.
2 million stringed copper coins discovered from a 2,000-year old Han tomb in Jiangxi Province.
The Separation of the Value and Weight of the Coin
Coins discovered in a Tang Dynasty tomb
The separation of the value and weight of the currency during the Tang Dynasty marked another milestone in the development of China’s currency system.
This is a coin issued during the Song Dynasty (960–1279) with the characters in Emperor Huizong’s Slim Gold style.
These are the front and the back sides of copper coins issued during the early Ming Dynasty in the late 14th century.
In the coins, 洪武 refers to the era when the founding Ming Emperor Hongwu (1368-1398) reigned, 通 means trade and 宝 suggests treasure.
Silver and Gold Ingots
Gold pieces – High valued currency issued 2,300 years ago during the Warring States period (475 BC – 221 BC)
Unearthed Song Dynasty silver ingots
Since the Song Dynasty, silver ingots legally became part of the currency system.
An unearthed Ming Dynasty gold bar
Historically, the gold coins and gold bars in China were not used in circulation but as valuable collections and, understandably, only wealthy or privileged households could afford such fortune.
China is the first country in the world to use banknotes as currency.
The earliest form of banknote was briefly used in China during the Shang Dynasty more than 3,000 years ago.
In the 9th century during the Song Dynasty, 16 commercial businesses in the city of Chengdu, in today’s Sichuan Province, printed paper banknotes called 交子 (a note for trade) to substitute metal coins for the convenience of their credited consumers.
A few years later in 1023, the central government in Kaifeng made it illegal for private individuals or businesses to print money. Instead, it issued official banknotes for circulation.
Each Song banknote was backed by a metal coin of equal value and only valid for three years. After three years, the old banknotes would be recalled while the new ones issued.
When the Mongols ruled China in the post-Song era, they kept printing banknotes whenever they needed money, which resulted in the first inflation in human history in 1260.
However, it was not until the Ming Dynasty that paper notes became widely used in China, thanks to the low-cost printing technology developed at the time, which ironically caused high inflation in the 15th century thus the paper notes were once again replaced by copper coins.
An Ming Dynasty banknote found inside a wooden Buddhist Ahart’s head
The note was issued in 1370, the third year of the Ming Dynasty (1368 – 1644).
Ancient Coins from Overseas
This silver coin from the ancient Persian Empire was unearthed in 1970 in Shaanxi Province.
The coin is believed to be brought to the Chinese capital by Arabian caravan merchants from the Eastern Roman Empire via the Silk Road.
This gold coin issued by the Byzantine Empire was found in a 4th-century royal tomb in the ancient capital Luoyang, Henan Province.
It is from this royal tomb excavated recently that the East Roma’s gold coin was discovered.
Ancient Coins That Were Not Used as Money
The front and back sides of a Song Dynasty gold coin
This Song Dynasty gold coin engraved with Buddha statues was not used for trade but as an artwork commemorating a significant historical event.
This is a feng shui coin carved with four directions and the name of the 28 constellations along the edge.
This is a feng shui coin carved with symbols of 4 directions (dragon for the east, bird for the south, tiger for the west and turtle for the north), 12 zodiacs (rat, ox, tiger, rabbit, dragon, snake, horse, goat, monkey, rooster, dog and pig), 8 trigrams and 28 constellations.
This is an old Chinese coin engraved with a star chart including the Milky Way.
Traditionally, old coins in China are frequently used as a feng shui cure, since coins are closely associated with the valuable things in people’s lives thus a positive link could be established.