Chinese Sycee History

Silver in ancient China was very rare and precious due to the lack of rich domestic mines. Silver deposits usually were found in the same ore bodies as minerals such as quartz, lead, and antimony, and the technology for refining and purifying silver was not mastered until the Tang Dynasty, a much later date than that for copper.

In the 1970s, in 扶溝縣 "Fu Go County" of Hobei Province, several pieces of 空首布 "Hollow Headed Spades"(*) made of silver were unearthed. These specimens have been authenticated as belonging to the Spring Autumn (770-476 BC) and  to the Warring States Periods (475-221 BC). During these periods a form of copper currency had been cast in a spade shape and circulated through several nations in northern China. This discovery, the only one of its kind, can not prove that silver was treated as currency at such an early time in China. In fact, most researchers and numismatists believe that the silver spades were part of a noble's buried treasure, since the metal was too rare to be a trade medium and too expensive to be publicly circulated. 

It is also recorded that during the Western Han Dynasty(202 BC-5 AD), Wu T'i had issued a series of 3 kinds of silver currency, and Wang Mang of  the Hsin Dynasty (8-23 AD) had also issued 2 varieties of silver currency, but both efforts completely failed. Wu T'i's overvaluation of the silver currency prompted widespread forgeries, and hundreds of thousand of forgers were caught and executed. Not a single example of either Wu T'i's and Wang Mang's silver currency has been found, and they have become 2 mysteries of Chinese numismatic history.

During the Tang Dynasty, silver output remained very limited, despite an aggressive effort to increase silver mining and the introduction of new refining and purification techniques. According to historic records, in the reign of Hsuan Zhong (847-659) the annual nationwide silver production was about 25,000 taels. As a result, China did not produce enough silver to use as currency, and copper cash was still the major form of coinage. Although
silver rectangular bars  dating to the Tang Dynasty have been excavated in recent years, their inscriptions indicate that they were a form of tribute presented to the Emperor by officials, and were not used as currency. Silver¹s role seem to be restricted to that of a royal reward, and ornament to artwork.

The long-term shortage of silver caused it to remain extremely rare and expensive in China; its price consistently remained at a higher level than its value in the western cultures- Roman, Byzantine and Persian. As a result of the persistent demand for the metal, silver began to be transported to China for profit making reasons, in particular by Persians and Arabians. During the Tang Dynasty, this foreign silver may have been a  major source of supply.  In recent years, a large number of ancient foreign silver coins, the most common being Sassanian silver Drachms, have been excavated in Si-An, Xinjiang and other locations.

During the Sung Dynasty domestic silver production increased significantly. In the Northern Sung, the annual national silver production varied from 210,000 to 880,000 taels (#1). This increased supply of silver is confirmed by records of the tremendous amount of silver continuously paid to its opponents- the Liao, Western Xia and Jin -as tributes or war indemnities, and also by the use of silver as a trade medium both domestically and with these 3 countries. The Sung Dynasty (Northern 960-1127, Southern 1127-1279) was distinguished by flourishing commercial activity and a dynamic economy during which some of the largest amounts of copper cash coins in Chinese history were cast and put into circulation. However, the low value of cash coins made high valued transactions unwieldy since the sheer volume of coins could not easily be transported or stored.  

Using silver as currency, then, became an alternative. As some goods became priced in silver, many silver shops were opened in the capital. Currency exchange, sycee casting, and assaying became general practice. Hundreds of Sung sycee specimens, including official and mercantile examples, have been excavated. While silver in the Sung Dynasty played a more important role as currency than before, it was still not widely circulated. Silver remained a valuable treasure, and in most cases still had to be exchanged for cash coins before being used as payment.

Silver's importance as currency increased significantly in the early Yuan Dynasty (Mongolian Empire: 1206-1271, Yuan Dynasty: 1271-1368). The new Mongolian rulers brought with them the concept that silver should be one of the major currencies of the empire. They legislated the exchange rates among 3 major silver ingots of different fineness--白銀"Bai Yin" (White Silver), 花銀"Hua Yin" (Flowery Silver), and 課銀"Ke Yin" (Tax Silver)-- and paper notes as 1 (tael): 1.95 (Guan, generally equal to 1000 cash), 1:2.00, and 1:2.05, respectively. Silver was treated as legal tender, and a connection between it and other currencies was developed.

When the empire decided to adopt the paper note policy of its former enemies- the Southern Sung and Jin – the circulation of silver began to be restricted or even banned. However, this temporary setback did not cause silver to lose its attraction; the unlimited issuance of paper notes by the empire created serious inflation, and as a result, through the remainder of the Mongol Empire, silver was used by people secretly and privately instead of the devalued paper money.

During the Yuan Dynasty, China obtained its most significant domestic supply of silver when  Kublai Khan's Mongolian troops conquered Yunnan and incorporated this remote south-western area into China's territory. The contribution of Yunnan¹s silver mines caused the national silver production to double. Despite this large production,
inscribed Yuan silver ingots are now extremely difficult to find, which  is likely caused by the Mongolian monetary policy restricting the use of silver. Since most trade using silver was conducted underground, silversmiths preferred to leave specimens uninscribed in an effort to avoid potential troubles with officials.

Subsequent to the Yuan Dynasty, silver ingots continuously circulated in the Ming Dynasty (1368-1644), until another "paper money only" policy was implemented in the 8th year of its 1st emperor Hung Wu (1466 AD). Again, silver ingots were forced to be hidden and circulated secretly. People never gave up using silver, since the paper money was debased, and they even resort to barter rather than using paper notes. This situation lasted for several decades until the silver ban was abolished by emperor Yin Zhong (1435-1450, 1457-1464). Silver was once again widely circulated in China, and almost all the surviving Ming silver ingots date from that time.  According to a historical record, officials of late Ming period received their salaries10% in cash coins and 90% in silver, and all levels of Chinese people conducted transactions using silver.

Such a surge in silver's usage put upward pressure on its price. Domestic growth in supply could not keep pace with the demand, since during the Ming Dynasty, even with the addition of Yunnan's silver output, China’s annual production never exceeded 340,000 taels of silver. Even late in the Ching Dynasty (1644-1911), production only increased to 460,000 taels per year, less than the peak production of the Sung Dynasty. This left tremendous room for great quantities of foreign silver to fill the void.

 Beginning in the late 16th century, immense amounts of silver produced by the Spanish colonial mines of Potosi, Peru, and Mexico began to be brought into China directly or indirectly by Spanish, Portuguese and Dutch galleons. According to researchers, over 515,600,000 Spanish silver dollars had been imported into China between the latter part of 16th century and the outbreak of Opium War (#2).

The New World silver shipped to China was in the forms of silver cobs and round coins.  Initially, these were melted down and recast as silver ingots for domestic circulation. After testing the foreign silver with chops and chisels for a several decades, the Chinese gradually began to accept that foreign silver was of an uniform weight and a purity standard similar to that accepted in China. The silver then began to be used directly and Spanish cobs and pillar dollars, Dutch ducatons, and later on, Mexican eagle dollars, American trade dollars, and many more from other countries, was able to circulate freely.

During the end of the Ming Dynasty and the beginning of the Ching Dynasty, the evolution of Chinese silver ingots was dramatic and amazing. Different regions in the country started formulating their own local shapes, unit weight, weighing scale, and finess standard for silver ingots.  

After a thousand years of circulation, it would seem to be a natural evolution for the shape, weight, and quality of a currency to become streamlined, simplified, and unified. The Chinese silver ingot currency's development, however, was in the opposite direction. It began with the Tang Dynasty's 50 tael rectangular bar and the Sung's axed ends and waisted ingots in 50 taels, 25 taels and 12.5 taels, then proceeded to the Yuan's ingots with their own characteristic shape. During the Ming, the rims at the ends began to stand up and appear as ears or wings to create the form a preliminary Boat.  Later in the Ching Dynasty, in addition to the traditional
Boat shape, more distinct varieties  of sycee were created, such as Drum, Groove, Square, Trough, Waist, Round, and Saddle; even the Boat shape underwent further evolution as can be seen with varieties like Big-winged and Tortoise.

Each time a silver pattern changed, it became more complicated and more difficult to handle. The casting process of each new silver pattern always required more skill and workmanship, and the entire silver currency system needed more people involved in weighing and assaying. While it kept many people employed, the system also made using silver more and more inconvenient and expensive. Gradually, Chinese silver ingots were replaced by foreign silver coins, and from 1890,  Chinese machine struck silver coins began to circulate.

Eventually, China demonetized all silver taels in 1933. Most of the silver ingots in China then were melted down for coining silver dollars.

#1 Peng Hsin Wei, "The History of Chinese Currencies" P.508, 1988 ed., Shanghai Renmin Publishing Co.

 #2 Zhuang Guo Tu, "An Estimate on the silver floated into China during 16th-18th Century" China Numismatics. Quarterly, 1995.3 pp3-10.

* Link to Museums for the image of Silver Hollow Headed Spade: Hanaga (Hong Kong) 

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