Paper Money Introduced in the Song Dynasty

Coins and ingots were made from various metals such as brass, copper, silver and gold. Paper money was first officially used during the Song dynasty (960-1279) and continued, with varying fluctuations, to be used as currency throughout the subsequent dynasties. However, the circulation of paper money was limited during the Qing dynasty and their monetary system was based on silver and copper.

Silver Ingots

For major transactions silver ingots, known as `sycee', (so called because the surface of the silver looked like fine silk, xi si,) were used, their value being based on their weight measured in taels.

For smaller transactions copper alloy cash was used, whereby one thousand copper cash equalled one tael of silver, though there were inevitably fluctuations from time to time. Strings of copper cash were carried usually in multiples of a hundred.

Copper Cash and Silver Dollars

Copper cash was often forged, and the purity of silver sometimes in doubt, so a system based on a precious metal with a guaranteed size, purity and weight was needed. Such currencies had existed in the west, and so in the Treaty Ports, where westerners resided, silver dollar coins were introduced.

By end of 19th century many foreign dollars were circulating in the coastal areas, particularly the Spanish "Carolus dollar" with the portrait of Charles III (1759-1788), and the Mexican dollar which became the chief currency in Hong Kong.

The reliable purity of these foreign dollars put China's currency at a disadvantage and eventually led to their own production of silver coins, the earliest in the reign of the Daoguang emperor. Modern mints were established in the capitals of many of the provinces, as well as in Hong Kong, during the latter part of the 19th century.

The dollar coins were marked `seven mace, three candareens', (a mace being one tenth of a tael, and a candareen being one hundreth of a tael) later changing to seventy-two per cent of a tael in line with the weight of foreign dollars in circulation. Coins were produced in varying quantities, patterns and length of circulation. The rarity of some of these coins makes them very desirable for collectors.

Currency in Hong Kong in the Nineteenth Century

Gold coins were added to Hong Kong's currency in 1845, but the Mexican dollar continued to be preferred. Banknotes were first issued by the Oriental Bank in Hong Kong in 1845, with other banks following suit.

In China first the government then commercial banks began to issue banknotes, and after the founding of the Republic of China many of the provinces began to issue paper currency as a means of raising funds.

Chinese Coins Make Top Dollar at Auction

In a recent auction sale in the USA, a rare, uncirculated Chekiang Province silver pattern dollar, Kuang Hsu, Year 23 (1897). sold for US$320,000 - proof of the power of rare Chinese coin investment.