1.4: Prosperity in Ming China

The Chinese Economy in 1500

China, in terms of population and economic power, was the center of the world in 1500. The Ming Empire was powerful, because it had a standing army of over a million soldiers and the Chinese navy of Zheng He had recently projected the empire’s power throughout Asia. The Chinese economy produced one quarter of the world’s gross domestic product (GDP) in 1500, followed by India which produced nearly another quarter. In comparison, the fourteen nations of western Europe produced just about half of China’s GDP or only one-eighth of the global total production. The largest European economy, in Italy, produced only about one-sixth of China’s output.

The Ming Empire’s population in 1500 was about 125 million. The next largest empires were Southern India’s Vijayanagara Empire (16 million), followed by the Inca Empire of South America (12 million), the Ottoman Empire (11 million), the Spanish Empire (about 8.5 million), and the Ashikaga Shogunate of Japan (8 million). Keep the immense mass of China and the gravity exerted by its economy in mind as we move on to discuss events like the creation of a Spanish colonial empire in the Americas—Spanish-American mines produced the silver that accidentally became the world’s currency, filling not only the treasuries Europe, but also that of China in the sixteenth and seventeenth centuries.

The key to China’s robust economic development was an elaborate river transportation network. Thousands of canals were built or repaired, and depopulated areas were settled. The government extended irrigation, paved roads, stocked public granaries, and constructed flood-prevention works. China’s economy boomed, and many Chinese peasants began to focus on producing goods for the foreign market. In Jingdezhen in Jiangxi province, people mass-produced porcelain.

For the most part, the government encouraged the production of commercial crops such as cotton and indigo. Under the Ming, cotton became for the first time, the predominant fabric of daily clothing for most people. It was cheaper and more durable than silk and displaced courser and more labor-intensive hemp and linen. Other farmers raised mulberry trees and harvested their leaves to sell to families that raised silkworms (which feed on the leaves). Peasants who specialized in the raising of silkworms in turn sold their cocoons to others, who boiled them to kill the larvae and unreeled them to make silk thread. This thread was sold to households that wove silk cloth, which might then be passed on to those who specialized in embroidery.

Figure \(\PageIndex{1}\): Copyright Rice University, OpenStax, CC BY

Silver

The voyages of Zheng He did end up having an unintended consequence whose impact would be global. Chinese dynasties had been employing paper currency since the 11th century. The earlier systems had backed paper currency with grain (meaning you could exchange, or “convert”, your paper for its value in grain), but during the Ming, money was not backed and was not convertible. The building and maintenance of the naval fleet was a breaking point for paper currency. To meet the costs of shipbuilding and supply the state printed far too much money leading it to tank in value. By the mid-15th century, just as the voyages were ending, increasing numbers of merchants were refusing to accept paper in return for their goods. In place of paper, a more informal system of barter emerged with sellers and buyers determining what constituted fair value. Localities tended to develop their own mediums of exchange so that in some places it could be bolts of silk, in others grain, and some areas even began minting their own copper coins.

Without a clear long-term plan, the Ming began slowly and sporadically introducing a new system in which copper coins would be minted for everyday purchases while large purchases would be made with silver. Along with this, emerged a new tax policy. Instead of taxing each local area in grain and labor, the Ming gradually began requesting tax payments in silver. One problem was that the supply of silver was not great enough to keep up with the huge demand that would come from requiring all 120 million subjects of the Ming to pay taxes in silver. This challenge was gradually resolved by enormous increases in the global silver supply. Japan became major supplier for the first half of the 16th century, and silver became the key to Ming growth during the 1500s. Ming consumers and traders mistrusted anything but silver or gold for commercial transactions. Figure 1.4.1 shows East Asia, and China is very close to Japan. Merchants in China were involved in short-distance trade with Japan for silver.

Review Questions

• How was the Ming economy prosperous in the 1400s and 1500s?
• Why was silver so crucial to the emergence of a global economy?