Economy of the Ming Dynasty
Encyclopedia
The economy of the Ming Dynasty
Ming Dynasty
The Ming Dynasty, also Empire of the Great Ming, was the ruling dynasty of China from 1368 to 1644, following the collapse of the Mongol-led Yuan Dynasty. The Ming, "one of the greatest eras of orderly government and social stability in human history", was the last dynasty in China ruled by ethnic...

(1368-1662) of China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...

 was the largest in the world during that period. It is regarded as one of China's three golden ages
Golden Age (metaphor)
A golden age is a period in a field of endeavour when great tasks were accomplished. The term originated from early Greek and Roman poets who used to refer to a time when mankind lived in a better time and was pure .-Golden Age in society:...

 (the other two being the Han
Han Dynasty
The Han Dynasty was the second imperial dynasty of China, preceded by the Qin Dynasty and succeeded by the Three Kingdoms . It was founded by the rebel leader Liu Bang, known posthumously as Emperor Gaozu of Han. It was briefly interrupted by the Xin Dynasty of the former regent Wang Mang...

 and Tang
Tang Dynasty
The Tang Dynasty was an imperial dynasty of China preceded by the Sui Dynasty and followed by the Five Dynasties and Ten Kingdoms Period. It was founded by the Li family, who seized power during the decline and collapse of the Sui Empire...

 periods). The period was marked by the increasing political influence of the merchant
Merchant
A merchant is a businessperson who trades in commodities that were produced by others, in order to earn a profit.Merchants can be one of two types:# A wholesale merchant operates in the chain between producer and retail merchant...

s, the gradual weakening of imperial rule
Emperor of China
The Emperor of China refers to any sovereign of Imperial China reigning between the founding of Qin Dynasty of China, united by the King of Qin in 221 BCE, and the fall of Yuan Shikai's Empire of China in 1916. When referred to as the Son of Heaven , a title that predates the Qin unification, the...

, and technological
Technology
Technology is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. It can also refer to the collection of such tools, machinery, and procedures. The word technology comes ;...

 advances.

Coinage

Despite issuing paper money in the early part of the dynasty, the Ming ended up using silver
Silver
Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...

 as a means of exchange
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...

 in their economy; this is due to the massive inflow of silver into the Ming economy throughout the dynasty. The amount of silver used by the Ming economy was extraordinary; the Zheng clan, which was a major clan of merchants in the late Ming, regularly engaged in transactions of several million tael
Tael
Tael can refer to any one of several weight measures of the Far East. Most commonly, it refers to the Chinese tael, a part of the Chinese system of weights and currency....

s, at a time in which English
Kingdom of England
The Kingdom of England was, from 927 to 1707, a sovereign state to the northwest of continental Europe. At its height, the Kingdom of England spanned the southern two-thirds of the island of Great Britain and several smaller outlying islands; what today comprises the legal jurisdiction of England...

 traders considered tens of thousands of pounds an extraordinary fortune. However, both coin
Coin
A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....

 and paper money
Banknote
A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...

 were used throughout the Ming dynasty. Ming demand for silver was such that at one point most of the output of the mines of Peru went straight to Ming China.

Manufactures

The Ming manufacturing industry was more varied and advanced than that of the Song. Ming iron
Iron
Iron is a chemical element with the symbol Fe and atomic number 26. It is a metal in the first transition series. It is the most common element forming the planet Earth as a whole, forming much of Earth's outer and inner core. It is the fourth most common element in the Earth's crust...

 production surpassed all previous dynasties, with annual production of 195,000 tons a year, compared to 125,000 tons during the height of the Song Dynasty (960-1279) and 180,000 tons for the whole of 18th-century Europe. The Ming charged a 1/15 tax on all iron production.

Privatization

Another key feature of the Ming manufacturing industry was privatization
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...

. Unlike the Song, in which state-owned enterprises
Government-owned corporation
A government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government...

 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.

Emergence of wage labor

The Ming government abolished the mandatory forced labor by peasants used in early dynasties and replaced it with wage labor. A new class of wage laborers sprung up where none had existed before. In Jingde alone, it was reported that there were no less than 300 pottery factories, all operated by wage laborers.

Early encouragement of agriculture under Hongwu

In order to recover from rule of the Mongols and the wars that followed them, the Hongwu Emperor
Hongwu Emperor
The Hongwu Emperor , known variably by his given name Zhu Yuanzhang and by his temple name Taizu of Ming , was the founder and first emperor of the Ming Dynasty of China...

 enacted pro-agricultural policies. The state invested extensively in agricultural canals, reduced taxes on agriculture to 1/30 of the output, and later to 1.5% of agricultural output. Ming farmers also introduced many innovations such as water-powered plows, and new agricultural methods such as crop rotation. This led to a massive agricultural surplus that became the basis of a market economy.

Emergence of commercial plantations

The Ming saw the rise of commercial plantations who produced crops suitable to their regions.
Tea, fruits, paint and other goods were produced on a massive scale by these agricultural plantations. Regional patterns of production established during this period continued into the Qing dynasty.

Introduction of American crops

The Columbian exchange
Columbian Exchange
The Columbian Exchange was a dramatically widespread exchange of animals, plants, culture, human populations , communicable disease, and ideas between the Eastern and Western hemispheres . It was one of the most significant events concerning ecology, agriculture, and culture in all of human history...

 brought crops such as corn
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...

 and potato
Potato
The potato is a starchy, tuberous crop from the perennial Solanum tuberosum of the Solanaceae family . The word potato may refer to the plant itself as well as the edible tuber. In the region of the Andes, there are some other closely related cultivated potato species...

es to China, causing a massive increase in the amount of land under cultivation, as land that had been unable to support traditional crops were planted with these foreign crops. During the Ming, specialized areas also popped up planting large numbers of cash crops that could be sold at markets. Large numbers of peasants abandoned the land to become artisans. The population of the Ming boomed; estimates for the population of the Ming range from 160 to 200 million.

Rural markets during the Ming

Ming agriculture was much changed from the earlier areas; firstly, gigantic areas, devoting and specializing in cash crops, sprung up to demand from the new market economy. Secondly, agricultural tools and carts, some water-powered, help to create a gigantic agricultural surplus which formed the basis of the rural economy. Besides rice, other crops were grown on a large scale.

Although images of autarkic farmers who had no connection to the rest of China may have some merit for the earlier Han and T'ang dynasties, this was certainly not the case for the Ming dynasty. 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. Many of these markets appeared in the rural countryside, where goods were exchanged and bartered.

A second type of market that developed in China was the urban-rural type, in which rural goods were sold to urban dwellers. This was particular the case when landlords decided to reside in the cities, and use income coming from rural land holding to facilitate exchange in the cities.
Another way this type of market was used was professional merchants who bought rural goods in large quantities.

The third type of market was the "national market" which was developed during the Song dynasty but particularly enhanced during the Ming. This market involved not only the exchange described above, but also products produced directly for the market. Unlike earlier dynasties, many Ming peasants were no longer producing only products they needed; many of them produced products for the market, which then they sold at a profit.

Trade and investment

In the early Ming, after the devastation of the war which expelled the Mongols, the Hongwu Emperor
Hongwu Emperor
The Hongwu Emperor , known variably by his given name Zhu Yuanzhang and by his temple name Taizu of Ming , was the founder and first emperor of the Ming Dynasty of China...

 imposed severe restrictions on trade. Believing that agriculture was the basis of the economy, Hongwu favoured that industry over all else, including that of merchants. However, after his death, most of his policies were reversed by his successors. By the late Ming, the state was losing power to the very merchants which Hongwu had wanted to restrict.

The Ming dynasty also engaged in a thriving trade with both Europe and Japan. The amount of silver flowing into the Ming dynasty was estimated by Joseph Needham at 300 million taels, which is equivalent to more than 190 billion dollars in today's money. In addition to silver, the Ming also imported many European firearms, in order to ensure the modernity of their weapons.

Trade and commerce thrived in this liberalized economy, and was aided by the construction of canal
Canal
Canals are man-made channels for water. There are two types of canal:#Waterways: navigable transportation canals used for carrying ships and boats shipping goods and conveying people, further subdivided into two kinds:...

s, road
Road
A road is a thoroughfare, route, or way on land between two places, which typically has been paved or otherwise improved to allow travel by some conveyance, including a horse, cart, or motor vehicle. Roads consist of one, or sometimes two, roadways each with one or more lanes and also any...

s, and bridge
Bridge
A bridge is a structure built to span physical obstacles such as a body of water, valley, or road, for the purpose of providing passage over the obstacle...

s by the Ming government. The Ming saw the rise of several merchant clans such as the Huai and Jin clans, who disposed of large amounts of wealth. The gentry
Gentry
Gentry denotes "well-born and well-bred people" of high social class, especially in the past....

 and merchant classes started to fuse, and the merchants gained power at the expense of the state. Some merchants were reputed to have a treasure of 30 million taels.

Overseas Trade

The Ming engaged in much overseas trade. A respected sinologist, Joseph Needham believed that the amount of silver flowing into Ming China through trade amounted upwards to 300 million taels of silver. To put this into perspective, the Ming government's entire annual revenues were only 27 million taels, and the Ming had 31% of the world's GDP.

Initially, the Ming engaged in state-sanctioned overseas trade. This was best exemplified by the expeditions of Zheng He
Zheng He
Zheng He , also known as Ma Sanbao and Hajji Mahmud Shamsuddin was a Hui-Chinese mariner, explorer, diplomat and fleet admiral, who commanded voyages to Southeast Asia, South Asia, the Middle East, and East Africa, collectively referred to as the Voyages of Zheng He or Voyages of Cheng Ho from...

, the eunuch admiral, who visited India, East Africa, and Indonesia seven times in massive fleets. However, like many other industries, the trade gave way to the merchants. By the 15th Century, the Ming had abolished the restriction on private overseas trade and Ming merchants prospered. One evidence of this prosperity was the wealth of the Zheng Clan, (Chinese:郑芝龍集團) an influential group of overseas traders who had their own navy and set up their own overseas outposts. The Zheng clan drove the East India company out of Taiwan and virtually out of business in East Asia.

Taxation

Ming taxation was light. Taxes on agriculture were only 1/30 of agricultural produce, and were later reduced to 1/50 of produce. Taxes on commerce amounted to 1/30 of commerce also, but was later reduced to 1.5%. These low taxes spurred trade, but severely weakened the state. With the coming of the Little Ice Age
Little Ice Age
The Little Ice Age was a period of cooling that occurred after the Medieval Warm Period . While not a true ice age, the term was introduced into the scientific literature by François E. Matthes in 1939...

 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.

Weakening of the state

During the Ming, the controls imposed on the economy were gradually relaxed. State monopolies
Government monopoly
In economics, a government monopoly is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law...

 on salt
Salt
In chemistry, salts are ionic compounds that result from the neutralization reaction of an acid and a base. They are composed of cations and anions so that the product is electrically neutral...

 and iron ended as these and other industries were privatized. Taxes were reduced from the high levels under the Mongol Yuan
Yuan Dynasty
The Yuan Dynasty , or Great Yuan Empire was a ruling dynasty founded by the Mongol leader Kublai Khan, who ruled most of present-day China, all of modern Mongolia and its surrounding areas, lasting officially from 1271 to 1368. It is considered both as a division of the Mongol Empire and as an...

, and the Ming had one of the lowest tax rates (per person) in the world. The entire foreign trade, which was estimated at up to 300 million taels, provided the Ming with a tax of only about 40,000 taels a year. When the Wanli Emperor
Wanli Emperor
The Wanli Emperor was emperor of China between 1572 and 1620. His era name means "Ten thousand calendars". Born Zhu Yijun, he was the Longqing Emperor's third son...

 sought to increase the salt tax, his measures were opposed by violence and the eunuchs he send to collect the tax were beheaded by local officials.

Sprouts of capitalism

Investment and capital moved off the land and were poured into ventures. Continuing the trend from the Song, Ming investors poured large amounts of capital into ventures and reaped high profits. Many Chinese scholars believe the Ming was the dynasty in which the "sprouts of capitalism
Sprouts of capitalism
The sprouts of capitalism, seeds of capitalism or capitalist sprouts are features of the economy of Late Imperial China that mainland Chinese historians have seen as resembling developments in pre-industrial Europe, and as precursors of a hypothetical indigenous development of industrial...

" emerged in China, only to be suppressed by the Qing.

See also

  • Economic history of China
    Economic history of China
    China's economic system before the late-1990s, with state ownership of certain industries and central control over planning and the financial system, has enabled the government to mobilize whatever surplus was available and greatly increase the proportion of the national economic output devoted to...

  • Economy of the Han Dynasty
    Economy of the Han Dynasty
    The Han Dynasty of ancient China experienced contrasting periods of economic prosperity and decline. It is normally divided into three periods: Western Han , the Xin Dynasty , and Eastern Han . The Xin Dynasty, established by the former regent Wang Mang, formed a brief interregnum between lengthy...

  • Economy of the Song Dynasty
    Economy of the Song Dynasty
    The economy of China under the Song Dynasty of China was marked by commercial expansion, financial prosperity, increased international trade-contacts, and a revolution in agricultural productivity. Private finance grew, stimulating the development of a country-wide market network which linked the...


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