Global Flows of Silver and Copper: Revising Qing China's Monetary Tale in the 19th Century

The Qing Empire's dual monetary system, comprising copper cash coins and silver currency, experienced a dramatic transformation in the nineteenth century. While the state stabilized the 18th-century currency exchange rate through market intervention, between 1820 and 1850, the silver price of copper cash plunged by 76%, slashing state fiscal revenue by 40%. This drastic shift exacerbated Chinese citizens’ tax burden, who earned in copper cash but paid taxes in silver, contributing to the devastating Taiping Rebellion (1850-1864) that resulted in over 20 million deaths. Prevailing studies of 19th-century China’s monetary dynamics have prioritized silver, with copper cash being subsidiary. Influenced by Tang Xianglong's "silver outflow thesis" of 1929, most studies examine the interplay between silver circulation and international trade. This thesis suggests that the British opium trade instigated a massive drainage of silver from China between 1830 and 1850, a notion that has resonated in Chinese academic and nationalistic narratives since the 1930s. Notably, this perspective has been institutionalized in Chinese middle school history textbooks, reflecting its deep-seated influence on historical interpretation. Recent academic discourse, however, calls into question the silver outflow thesis, critiquing its excessive dependence on trade records from the English East India Company—data that represent a mere 30% of China's international commerce. Furthermore, opium imports accounted for only 3.6%-6.7% of the Qing Empire's total silver supply or 6% of the state's annual fiscal revenues, disputing its role as the primary agent of China's economic woes. This presentation advocates for a reevaluation of nineteenth-century China's financial system, factoring in both copper and silver currencies within the larger context of global commerce. It posits that British smuggling of Chilean copper may have profoundly reshaped China's monetary system by flooding the market with inferior copper cash, while also highlighting the importance of Sino-American trade in the international silver economy.