Recently, the co-authored paper Money Creation and the Divergence of Chinese and Western Monetary Systems by Professor Yan Hongzhong of the Department of Economic History at the School of Economics, Shanghai University of Finance and Economics, and doctoral student Zhuang Yan was officially published in Social Sciences in China, a top journal in the field of philosophy and social sciences.
Abstract
Money is important for the development of both Eastern and Western civilizations, but it is even more significant for China. The invention of state paper money in the Song Dynasty formed the first divergence in the development of Chinese and Western monetary systems. From the mid-Ming Dynasty onward, as the government's monetary dominance receded, money issuance gradually came to be dominated by private institutions. Monetary forms and credit tiers became diverse, forming a regional monetary system that, through mechanisms such as bookkeeping and transfer, offsetting and write-off, credit payment, reconciliation and clearing, and long-distance remittance, achieved an elastic money supply and credit expansion. The West, by contrast, through the evolution from bimetallism to the gold standard and the development of the banking system, gradually formed and strengthened a method of paper money issuance and deposit money creation centered on the banking system, constituting the second divergence in the development of Chinese and Western monetary systems.
China's unique monetary system development path and monetary culture from the Ming and Qing dynasties to modern times—including its highly marketized multi-tiered money and short-term credit system and its diverse innovations in monetary and credit instruments—led China and the West to present different development paths in the dynamic evolution of their monetary and financial systems. The examination of the two divergences in Chinese and Western monetary systems provides a new perspective for deeply understanding the historical development paths and civilizational characteristics of China and the West.
Author Biographies
Yan Hongzhong is Vice Dean of the School of Economics and Professor of the Department of Economic History at Shanghai University of Finance and Economics. He is a Young Scholar of the Ministry of Education's "National Talent Program" and a New Century Excellent Talent. He also serves as Executive Director of the Chinese Economic History Society and Deputy Director of its Special Committee, and Vice President of the Special Committee of the Chinese Business History Society.
He is the chief expert of a Major Project of the National Social Science Fund and an expert in the compilation of the "Marxist Theoretical Research and Construction Project" key textbooks Chinese Economic History and Chinese Finance. He has published more than 70 papers in core journals such as Social Sciences in China, Economic Research Journal, Historical Research, and China Economic Quarterly.
He has published 10 monographs, one of which was selected for the National Library of Philosophy and Social Science Achievements. His research findings have won four first prizes and two second prizes for Outstanding Achievements in Social Science Research at the provincial (municipal) level, two first prizes for provincial (municipal) Teaching Achievement Awards, and two third prizes for the Ministry of Education's Outstanding Achievements in Scientific Research in Higher Education Institutions.
Zhuang Yan is a 2020 master's-doctoral continuous program student at the School of Economics, Shanghai University of Finance and Economics, supervised by Professor Yan Hongzhong. His research areas are modern economic history and financial history.
