Angus Madisson, researcher at Groningen University, has estimated that through most of last 1000 years,
1. China & Neighbours - Gold Producers
2. Chinese - Great believers in silver
Chinese common coin was a silver coin - the tael (which came from the Malay word tahil; which came from Indian word tol; meaning ‘measure’). There were 2 taels - one was commercially pure silver ingot of one chinese ounce called a liang. The other was a kuping tael - which was coin. Bulk silver was used as currency and called sycee. There were many other taels like Tsaoping, Peking, Tientsin, Hankow,
Chinese rulers circulated paper money for longer (from 6th century onwards) and greater area than any country in the world. The first paper currency jiaozi was issued in 6th century - which collapsed very soon. The Song dynasty re-introduced paper currency in 9th century due to copper shortage. Probably, some Jewish merchants were also involved in the jiaozi manufacture.
Western consumers bought tea, silks and other Chinese commodities for which they paid in silver. The Chinese did not need much of western goods - like
In early 19th century AD, Opium imports into
Opium for China was produced by indebted Indian farmers and a few Parsi traders set up their offices in
Major opium trading companies like Jardine Matheson, David Sasoon & Company and sundry traders set up The Hong Kong & Shanghai Banking Corporation for facilitating this misery. The Chinese Opium problem was finally solved by several draconian measures during Communist rule.
When Chinese resisted the Opium flood, western traders resorted to war. The Japanese emboldened by new found wealth and military technology, joined western powers. The Sino Japanese Wars, The Opium Wars with Europeans and The Boxer Uprising before WW1 imposed large war reparations on the Chinese. The Civil War in
How did the Chinese preference for silver affect them?
In 1500, the approximate exchange ratio between gold liang and and silver liang was 1:4. Today it is 1:50. Silver mineral deposits, mining and availability is more elastic than gold. Elasticity of gold production is very low. Secondly, above ground supplies of gold are far higher than known below the ground estimates. Hence, manipulation of gold prices over a period of time is difficult.
On the other side,
What does this mean for others
And that is an opportunity others may not get!