Economy of the Ming dynasty

The period was marked by the increasing political influence of the merchants, the gradual weakening of imperial rule, and technological advances.

The early Ming dynasty attempted to use paper currency, with outflows of bullion limited by its ban on private foreign commerce.

These privately made "sycee" first came into use in Guangdong, spreading to the lower Yangtze sometime before 1423, the year it became acceptable for payment of tax obligations.

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 taels.

However, a second silver contraction occurred in the mid-17th century when King Philip IV began enforcing laws limiting direct trade between Spanish South America and China at about the same time the new Tokugawa shogunate in Japan restricted most of its foreign exports, cutting off Dutch and Portuguese access to its silver.

Unlike the Song, 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.

[5] In order to recover from the wars during the late Yuan dynasty, the Hongwu Emperor enacted pro-agricultural policies.

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.

[6] In the early Ming, after the devastation of the war which expelled the Mongols, the Hongwu Emperor imposed severe restrictions on trade (the "haijin").

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.

Trade and commerce thrived in this liberalized economy, and was aided by the construction of canals, roads, and bridges by the Ming government.

[7] Trade with Japan continued unobstructed despite the embargo, through Chinese smugglers, Southeast Asian ports, or Portuguese.

[15] The city of Manila served as a primary outpost of the exchange of goods between the Americas, Japan, Indian, Indonesia and China.

[16] The galleon trade was supplied by merchants largely from port areas of Fujian who traveled to Manila to sell the Spaniards spices, porcelain, ivory, lacquerware, processed silk cloth and other valuable commodities.

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 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.

Continuing the trend from the Song, Ming investors poured large amounts of capital into ventures and reaped high profits.