What does China’s first currency look like? when did inflation first occur? Why are banknotes burned every year and what is “Hell Bank”? 10 facts you probably did not know about Chinese money:
- The first bronze pieces that were used in China as currency, around the 7th-6th centuries BC, were spade-shaped coins.
A spade-shaped coin from the 6th century BC
2. The first round coin appeared during the 5-4th century BC. The coinage in China then underwent a transition in means of payment, and a new shape of coins was cast in the form of a round disc with a hole in the center. The holed disc remained the basic shape of Chinese coins until the 20th century.
A Chineses coin from the 5th century BC
3. Originally, the value of the coin was equal to its weight. However, from the 2nd century BC, the actual content of the coin was reduced, and the central hole was enlarged. From then on, a difference between the face value and the actual value of the metal became common.
4. The first occurrence of inflation in China was in the 2nd century BC, due to the massive recruitment of workers building the Great Wall, and a series of wars.
5. Due to the low value of a single coin, it was customary to form a string of 1000 coins into a purchasing unit.
6. The ancient Chinese currency was a means of exchange and a measure of value alone. In other words, the purpose of the Chinese currency was not to store value, and hence why it remained low in value for centuries. The Chinese believed that currency had to circulate in the social structure as blood flows in the human body.
7. The first time paper money was used was in China in the 9th century.
Chinese paper money from the 9th century
8. When Marco Polo arrived in China in the 13th century, he was impressed by the use of paper money. He described this amazing innovation in his journey records: “All these pieces of paper are issued with as much solemnity and authority as if they were of pure gold or silver”. When he returned to Italy, people did not believe his stories about the paper money in China. The West started printing banknotes centuries later.
9. The Chinese invented a method to detect forgeries. They hid secret marks on the bills and enforced strict regulations. Forgers were punished by the death penalty, while the informer received a reward in addition to the property of the criminal.
10. In Chinese tradition, it is customary to make offerings in honor of one’s ancestors. One of these offerings is burning “Hell banknotes”, a tribute to the King of Hell that is meant to ensure that the spirits are treated well in the afterlife. From the 19th century, millions of these paper notes have been burnt every year in celebration during the Chinese New Year festival.
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