Financial Crisis &Local Economy: Ch'üan-chou in the Thirteenth Century

Author(s): So Kee Long

Source: T'oung Pao, Second Series, Vol. 77, Livr. 1/3 (1991), pp. 119-137
Published by: BRILL
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 T'oungPao LXXVII (1991)

FINANCIAL CRISIS & LOCAL ECONOMY:

CH'UAN-CHOU IN THE THIRTEENTH CENTURY

BY

SO KEE LONG

Better known as Zayton in the West, the seaport of Ch'iian-chou

had occupied a prominent position along the China coast during
the Sung and Yuan Periods. The important role it played in the
empire's contact with overseas countries is particularly noteworthy
because the periods witness the most positive official policies to-
wards the commercial sector, especially overseas trade, which
undoubtedly contributed a great deal to the general prosperity of
the country at large.' This has become a common view and there is
little one can dispute about its validity in general. Nevertheless, in
a closer examination, it is still possible to discover that at the local
level an oversimplified generalization often overlooks important
changes over times, which in fact reveal certain subtle characteris-
tics of the economy. The various economic problems emerged in
the seaport during the thirteenth century serve to illustrate this
point.
It has long been the impressionthat the prosperityof Ch'iian-chou
continued without interruption from the Southern Sung through
the Yuan dynasty.2 Yet recent scholarship has shown that there
had been recession in the prefecture at the turn of the thirteenth

I
For the role of commerce in Sung economy, the best account comes from
Shiba Yoshinobu Ag , Sodaishogyoshikenkyiu
1 Atit_r (Tokyo: Kazama
shobo, 1968); "Sung Foreign Trade: Its Scope and Organization," in Morris
Rossabi ed., ChinaAmongEquals, (Berkeley & Los Angeles: University of Califor-
nia Press, 1983), pp. 89-115. For discussion on implication of the economic
progresses in Sung-Yuan China, see Mark Elvin, The Patternof the ChinesePast,
(Stanford: Stanford University Press, 1973); especially part II.
2 For instance, Kuwabara Jitsuzo AfW%M, Ho Juko no jiseki iMwX0M,

(Tokyo: Kazama shobo, 1935), pp. 35-37; Lo Hsiang-lin W, P'u Shou-keng

yen-chiuRiTJF5E, (Hongkong: Chung-kuo hsiueh-she, 1959), pp. 93-107; Narita
Setsuo BgT, "So-Gen jidai no Senshu no hattatsu to Kanton no suibi
eW6DAv," Rekishigakukenkyii6:7 (July 1936): 730-736.

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120 SO KEE LONG

century, most noticeably in the field of overseas trade.3 Was it

incidental and temporary setback of a local economy? Was it
simply a manifestation of some national problems in a locality
which had been economically well integrated with other affluent
parts of the empire? Or does it reflect certain structural problems
underneath the booming local economy in that seaport? The pre-
sent essay attempts to deal with these questions by reviewing the
overall economic situation in the prefecture down to the Mongol
conquest.

1. The Coming of Financial Crisis

The first indication of recession in Ch'iian-chou is to be found in

the financial difficulties the local government encountered at the
beginning of the thirteenth century. In 1217, the renowned scholar-
official Chen Te-hsiu Al was appointed Ch'iian-chou prefect. In
a memorial expressing gratitude for his appointment, Chen states:
... Although, as a long established Fukien prefecture, Ch'iian-chou used to be a
place of prosperity, it has been gradually losing that position. Customs duty has
become so oppressive that import goods are decreasing. Flood and drought had
occurred one after another, causing bad harvests. Expenditures for the royal
clansmen living in this prefecture are double what they were previously. Conse-
quently prefectural treasury is running out of resources. Silver can no longer be
found in the mountains [where the silver mine was located], yet there is a quota
that Ch'iian-chou has to contribute on behalf of other prefectures each year. Since
rice growing in this place is very inadequate, [the locals] are anxious for the daily
arrival of rice shipments from other prefectures [in Liang-che and Liang-kuang].4

3 This
question was first raised by Ch'en Yii-ching in his annotated transla-
tion of Kuwabara's book on P'u Shou-keng. Ch'en gave evidence that overseas
trade in Ch'iian-chou had begun to decline markedly in the early-thirteenth
century, and did not flourish again until the Yuan. Kuwabara Jitsuzo, tr. by
Ch'en Yii-ching t , P'u Shou-kengk'ao MXTW (Peking: Chung-hua shu-chii,
1954), pp. 35-36. Ch'en's remark was however not pursued by others until Doi
Hiroko brought it up again in the 1980s and discussed it in more details. See Doi
Hiroko +RlEi , "Nan-So chuki igo ni okeru Senshu no kaigai boeki
s5J* At : I
AM "6 7'1'1 ," Ochano mizu-shigaku23 (April 1980): 50-66;
"Sodai no Senshu b6eki to soshitsulf~ v9I'IAl VA ," in Nakajima Satoshi
sensei koki kinen jigyo kai ed., Nakajima Satoshi sensei koki kinen ronshu
· ~fi
~~gT^,~1, (Tokyo: Kyfiko shoin, 1981), vol. 2, pp. 289-318. Most
recent account of the recession comes from Li Tung-hua ~-, Ch'iian-chou
yi
wo-kuo chung-ku ti hai-shang chiao-t'ung 7L')l'gl @_J:._ (Taipei:
Hsiieh-sheng
4
shu-chii, 1985), pp. 174-194.
Chen Te-hsiu, Hsi-shan hsien-sheng Chen Wen-chung kung wen-chi
1i1t.XM
_Cx:,, (SPTKCP ed.) 17: 19a/b.

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 FINANCIAL CRISIS & LOCAL ECONOMY 121

It may be assumed that, in general, memorials of this sort would be

inclined to exaggerate difficulties that the officials were to face in
their new appointments. Exaggeration of this kind could be used to
anticipate any possible administrative failure at a later time, or to
justify a claim to merit if things were going well. But Chen, as a
scholar-official with a reputation to uphold, is not likely to have
followed such a convention. In another memorial by him, this time
expressing his gratitude for an appointment as prefect in Fu-chou,
he wrote in a completely. different vein: not a single word is
mentioned of any problem relating to the coming appointment.5
This suggests that he was not the kind of official who convention-
ally exaggerated the difficulties of new appointment. Hence, Chen's
account of the financial problems in Ch'iian-chou is probably fairly
reliable.
Further information concerning the financial crisis can also be
found in Chen's biography in the SungHistoty.6It records that, due
to heavy customs duty, the number of vessels coming to Ch'iian-chou
at the time Chen took up office had dropped down to three or four
ships per year. After a lot of effort, Chen and other officials
managed to increase that number to thirty-six in the following year.
Chen left his Ch'uian-chou position in 1219, but was re-
appointed to the same post again in 1232 for another two years.
The impression one can get from his memorials written during this
second term of office is that the problem was even worse than it was
ten years previously. After six months in office, Chen presented a
memorial asking for extra monk certificates from the central gov-
ernment to cover the deficit due to expenses of the royal house-
holds. It states:
[Local] wealthy merchants have been so seriously exploited that many are
bankrupt. Only few can afford to voyage abroad again. [Of those who have
retained their financial capacity,] most have migrated to other coastal prefectures
in Kuang-tung circuit. Only a few are willing to return [to Ch'iian-chou]. During
my last term of office (1217-1219), the Office of Maritime Affairs was still able to
gain a profit of one hundred thousand strings of cash per year. This amount had
dropped to forty thousand in 1232, and has just barely risen to fifty thousand in
1233.7
In another memorial dealing with a personnel problem relating to
sub-prefects under his jurisdiction, Chen conveyed a very pessimis-

5 Ibid., 16: 6a/7a.

6 T'o T'o R , Sung-shihk , (Shanghai: Chung-hua shu-chii, 1977), 437:
12960.
7 Chen Te-hsiu, op. cit., 15: 13b.

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122 SO KEE LONG

tic view that now, unlike during his former term of office when
things were still somehow controllable, the financial problems of
the prefecture had become so complex that little could be done to
alleviate them.8
There is thus no doubt that the position of government finance in
Ch'iian-chou had been worsening since the beginning of the cen-
tury. And it seems that the problem remained unsolved for the
remainder of the dynasty. Two imperial edicts relating to appoint-
ments of the prefect of Ch'iian-chou can be used to further substan-
tiate this point. The first one issued in 1261 for an official named
Wu Chieh i- .9 After mentioning that the position of prefect was a
difficult one, the edict went on to mention four major problems
within the prefecture. These were: the mix of foreigners and locals,
the powerful local families, the exhaustion of the prefectural trea-
sury and the corruption of local officials. The other edict was issued
for an official named Hu ShenMf ,1O of whom no record is to be
found in gazetteers. This is probably because Hu was appointed
shortly before the collapse of the dynasty, or because for some
reason yet unknown the edict was not acted upon. But it is
noteworthy that the edict stated explicitly that the prefecture still
suffered from serious financial difficulties."
What are the implications of this financial crisis? To answer this
question, we need to determine first what brought the state of the
prefecture's finances to such a position. Financial problems involve
a failure to maintain a balance between revenue and expenditure.
Doi Hiroko is inclined to stress the expenditure factor. Drawing on
the above-mentioned memorial of 1233 by Chen Te-hsiu, she looks
primarily at the effect of the expenditure relating to royal clansmen,
and comes to the conclusion that it was this item that exhausted the
financial resources of Ch'iian-chou.12 Chen of course discusses the
increase in expenditure caused by the royal household, but the
overall argument in his memorial indicates clearly that the deficit
stemmed mainly from a decrease in revenue rather than from a
drastic increase of expenditure. He does confirm that the number of

8
Ibid., 17: la/b.
9 Liu K'e-chuang WIJ%A, Hou-ts'un hsien-shengta-ch'uan-chiXt4tLkit,
(SPTKCP ed.) 62: 52a/b.
10
Ibid., 69: 580b.
1l On the contrary, edicts relating to appointments of the prefect of
Ch'iian-chou in the twelfth century seldom mention any financial difficulties as
such. For instance, see the edict concerning Yen Shih-lu 0i9t, who was in office
in 1189. Lou Yfieh'l1f, Kung-k'ueichiTk4f%,(SPTKCP ed.) 35: 12a.
12
Doi, op. cit., 1980, pp. 60-64.

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 FINANCIAL CRISIS & LOCAL ECONOMY 123

royal clansmen in the prefecture, which rose from 349 in 1129 to

approximately 1,740 at the turn of the century, had reached 2,314
by 1232.13 Expenses on this item increase correspondingly. At first,
these expenses were shared with the Commissioner for Transport
in Fukien. Besides, the central government also subsidized the
prefecture by means of a certain amount of monk certificates each
year. But in the last two decades of the twelfth century, the
contribution of the Commissioner for Transport was substantially
reduced, and the subsidy with monk certificates terminated. Thus
most of the expenses of the royal households had to be met by the
prefectural treasury.'4 Chen goes on to argue that this financial
burden on the prefectural budget did not affect the total balance
before 1195, for the reason that the prefecture was still very rich at
that time. Revenue drawn from land tax and overseas trade was
adequate to make up the deficit.'5He then concludes that, although
expenditure on royal clansmen was a heavy burden to the prefec-
tural government, the recent financial problem was mainly the
result of a substantial decrease in the revenue from these two
sources in the decades after 1195.16 A further analysis of the figures
given by Chen may also be useful in supporting this view. The
increase of royal clansmen took place long before the local financial
problem appeared. According to Chen, their rate of increase was
about 500 per cent between 1129 and 1195, and 132 per cent
between 1195 and 1232.1' If we calculate the average annual
increase rates for the periods of 1129-1195 and 1195-1232, that of
the former period stands at 6 per cent, against less than one per
cent of the latter. Hence the problem that came into being during
the 1230s does not seem to have been an effect of a substantial
increase in expenditure on these royal clansmen after the 1200s as it
paucibly seems to be.
One of the causes of the deteriorating government financial
position, as can be seen clearly in references mentioned above, is
the setback in overseas trade. As that trade had been the most
important sector of the local economy, which was largely responsi-
ble for Ch'iian-chou's prosperity prior to the thirteenth century, it

13 Chen Te-hsiu, op. cit., 15: hla.

14 Ibid., 15: lla/13a.
15 Ibid., 15: 13a.
16
Ibid., 15: l3a/b.
17 Here my view is different from that of Doi. She conceives the phenomenon

as a chain-effect resulted from the increasing number of these royal clansmen. See
Doi, op. cit., 1980, pp. 60-64.

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124 SO KEE LONG

is not surprising that the local economy would have had problems
at this time. Another factor pointed out by Chen Te-hsiu, to be
discussed later, was that the revenue from land tax also witnessed a
considerable decrease. This indicates that in addition to the slump
in overseas trade, local agriculture must have been affected by
other problems as well .

2. TheDeclineof OverseasTrade

From Chen Te-hsiu's biography and his memorials already

cited, it is shown that overseas trade in Ch'iian-chou declined very
noticeably in the first quarter of the thirteenth century. The annual
income of the Office of Maritime Affairs that was mainly derived
from overseas trade had reduced from several hundred thousand
strings to around fifty thousand in the early 1230s. Since overseas
trade conducted in Ch'iuan-chou,whether import or export, had to
register and pay customs duty at that office, a marked decrease of
its income must indicate a corresponding decline in overseas trade.
Moreover, Chen made an observation that many Ch'iuan-chou
merchantssufferedbankruptcywhilst others migrated to Kuang-tung
for good. This can be substantiated by a poem by Liu K'e-chuang
J9;3VIwho wrote in mid-thirteenth century saying that the inhabit-
ants living in the commercial suburb adjacent to the Kuang-chou
city were mostly Fukien natives.'8 It is not difficult to imagine that
the majority of them would have come from Ch'iuan-chou, the
previously most prosperous prefecture in Fukien. The phenomenon
itself illustrates well the unfavourable commercial environment
now in Ch'iuan-chou.More important, it also shows that such was
not the case in Kuang-chou. In fact, I have so far not been able to
find any documentary evidence that indicates a similar recession in
Kuang-chou at this time.'9 The slump of overseas trade in
Ch'iian-chou thus represented a crisis in that locality rather than a
reflection of a nation-wide decline in overseas trade.

Liu K'e-chuang, op. cit., 12: 10a.

18

There is however indirect evidence of a booming overseas trade in Kuang-

19

chou in the 1240s. It comes from another poem by Liu K'e-chuang who was then
serving in the provincial administration in Kuang-chou. The poem started with a
vivid description of the prosperity of the city amid a local festival in the second
lunar month of the year. Following it was a depiction of interest here. It suggested
that there were so many mercantile ships arriving with the monsoon that Kuang-
chou had became reminiscent of the city of Yang-chou, a renowned centre of
foreign traders under the T'ang dynasty. Ibid., 12: 8a. For Liu's term of office in
Kuang-chou, see Kuang-tungt'ung-chih , 1822 ed., 16: 312a/b.

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 FINANCIAL CRISIS & LOCAL ECONOMY 125

It should be noted that Chao Ju-kua 'iL|, Superintendent of

Maritime Affairs in Ch'uan-chou in the early 1220s, had compiled
a vivid account of foreign countries trading with Sung China as
well as the commodities involved. It was prefaced in 1225 and thus
gave an impression that the vibrant maritime commercial activities
described in his book depict the situation of the 1220s. As pointed
out by many, it is necessary to handle the temporal factor of his
information with caution because quite a proportion of it was
borrowed from earlier works, such as Ling-wai tai-ta FfY~ by
Chou Ch'ii-fei J1^¢ in 1178.20From discussion above it is even
clearer now the overseas trade in Ch'uan-chou did perform very
badly during Chao's term of office as Superintendent of Maritime
Affairs in the seaport. In general, his description is more likely to
have reflected the situation in the twelfth century rather than his
own times, with only limited exceptions such as that ofJapan.
Were there any factors adversely affecting overseas trade at this
time? As mentioned by Chen, the corruption and veniality of local
officials was surely a significant factor in this regard. A poem
composed by Fang Ta-tsung i;~ik for Prefect Wang Hui-lung
TiEl of Ch'iian-chou, who was in office from 1240 to 1241, is
particularly revealing. It says:
Many benevolent prefects have governed this place before;
Now we have another well-learned scholar-official.
If [you] do not buy exotic goods [privately yourself],
there will come abundant mercantile ships.
If the tax rates are lowered,
there will come many traders.
If [you] do not have a luxurious diet,
those corrupted minds will be purified.

20
For instance, see Chao Ju-kua M&rd , annotated by Feng Ch'eng-chiin
/i74 , Chu-fanchih chiao-chu FHti , (Taipei: Taiwan Shang-wu yin-shu-
kuan, 1970), p. 30-34, n. 7 and p. 47, n. 2; F. Hirth & W.W. Rockhill, ChaoJu-kua:
His Workon the Chineseand Arab Tradein the Twelfthand Thirteenth Centuries,entitled
Chu-fan-chih, (St. Petersburg: The Imperial Academy of Sciences, 1911), p. 36-38.
Hirth & Rockhill however made a minor mistake by saying that information on
grivijaya in the book came primarily from the author's own oral survey. There are
in fact also important passages in the account of Srivijaya taken from Chou
Ch'ii-fei's work. See Chao Ju-kua, p. 13. There is another brief account of the
countries and commodities involved in the overseas trade in Ch'iian-chou which
testifies a flourishing seaport. But it is included in a miscellaneous work prefaced
in 1206. It is thus more likely to have reflected the situation in the twelfth century
when local economic problems were not yet acute. See Chao Yen-wei §d ,
Yiin-luman-ch'ao Mf ', (SKCS ed.), 5: 19b/20a.

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126 SO KEE LONG

If [you] are stern but fair,

all powerful families will obey you.21

Nevertheless, this type of obstruction had existed from the time

when an Office of Maritime Affairs was established in the prefec-
ture.22 Significant as it is, this factor alone is not sufficient to
explain a decline of overseas trade in Ch'iian-chou at this particu-
lar time.
It has been suggested that customs duty and compulsory official
purchase imposed on import goods had increased substantially in
late Southern Sung. Together with the rampant piracy they consti-
tuted another two factors accounting for Ch'iian-chou's recession.23
These are of course far from negligible. Both Chen and Fang
mentioned the negative effect of high tariff rates in the above
quotations. However, a careful consideration of the temporal el-
ement still shows that their actual impact should not be overesti-
mated.
For instance, the tariff for high-valued import items like pearl,
ivory, rhinoceros horn, aromatics etc. was set at the range of 6.6 to
10 % from early Sung through the mid-twelfth century.24Probably
due to the strained financial situation after the 1142 Treaty with
the Jiirchen it was temporarily raised to 40 % in 1144 but lowered
to the normal rate after 1147.25There is evidence that a higher rate
of 20 % tariff on precious items and a cross the board increase in
compulsory purchase had been enforced in Ming-chou out of the
local officials' initiative for some time, but this was rectified in 1164
in order to regain confidence of the maritime merchants to call at
the port.26The higher tariffrate was thus a malpractice by the local
officials instead of being a general policy. More important, the
incident strongly indicates the existence of a market mechanism
which deterred local officials to exploit the overseas traders by

21 Fang Ta-tsung)tk~ , Hu-shanssu-liu94weV91,(SKCSCP ed., Series II) p.

25a/b.
22 A
revealing example of this can be seen in the biography of a local official
named Tu Ch'unlti± who held offices some time between 1086 and 1093. It states
that only a few of the local officials were not involved in corruption in maritime
trade at that time. Sung-shih,330: 10632. Li Tung-hua also stresses the negative
effect of corruption, apart from heavy tariff, on the overseas trade. See Li, op. cit.,
pp.23178-184.
Li, ibid., pp. 174-180.
24
SungHui-yaokao5k*-Ai, (Taipei: Hsin-wen-feng chu-pen kung-ssu, 1976),
chih-kuan I', 44: lb.
25
Ibid., 44: 25a.
26
Ibid., 44: 27a/b.

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 FINANCIAL CRISIS & LOCAL ECONOMY 127

increasing the tariff arbitrarily as the latter could easily turn to

other alternative ports for trade. In early thirteenth century, local
tariff rate in Ming-chou was again raised to 40 % and was again
rectified in 1226 to ensure continuous flow of foreign trade.27There
is thus no evidence that the general tariff rate had been alterred
substantially during the Southern Sung, much less a sudden hike
that would have jeopardized the overseas trade in Ch'iian-chou in
early thirteenth century. Even if we assume some Ch'iian-chou
officials did arbitrarily raise the rates it is not likely that such
practice would have continued for a substantial period of time
without being rectified due to the market mechanism.
Nor can the rampant piracy convincingly account for the reces-
sion in Ch'iian-chou. From what information we have to date on
the Sung pirates in relation to Ch'iian-chou, it is evident that there
is hardly a sign of intensified activities of them in the thirteenth
century as compared to the previous century during which the
seaport enjoyed unprecedented prosperity. For instance, from 1135
to 1180 there were six recorded pirate raids in Ch'iian-chou and
its vicinity. Of these the last one was most devastating and resulted
in the death in combat of a commander-in-chief of the prefectural
garrison. From 1206 to 1274 three other raids were recorded, but
none reportedly presented a threat to the seaport comparable to
that of 1180.28
Turning to the external markets, which were crucial to
Ch'iian-chou's overseas trade, certain qualitative changes are dis-
cernible. For instance, the Chinese trade with Koryo, in which
Ch'iian-chou merchants used to played an important role, began to
decline at the end of the twelfth century. Throughout the first three
decades of the thirteenth century, there are only a few records of
Chinese voyages to Koryo. From the mid-1220s Koryo began to
suffer from the ordeal of Mongol invasion for almost thirty years
and was no longer a lucrative market for the Ch'iian-chou
merchants.29

27
'.]
Pao-ch'ingssu-ming-chih A.,, (Sung-Yuan ti-fang-chih tsung-shu ed.)
6: 2a/3a. See also Sato Keishiro (ft*fe R, Isuramu shogyo shi no kenkyu
- a- -
7. -1 FWIE, (Kyoto: Dohosha, 1981), pp. 345-346.
28
1612 ed., 24: 30b/32a; Ch'iian-choufu-chih,
Ch'ian-choufu-chih78JIF,ff7, 1763
ed., 73: 17a/18a; Chin-chianghsien-chihE]iI, , 1765 ed., 15: 43a/44b; Fu-chien
fC
t'ung-chih
29
,, 1867 ed., 86: 33a/b.
Sung Hsi 50tii, "Sung-shang tsai Sung-Li mao-yi chung ti kung-hsien
· ~ J37 ~1Rt.,"
.. X Shih-hsiiehhui-k'an 8 (1977): 95-96; Mori Katsumi
5A , Zoku Nisso boeki no kenkyfu [F WA © f,~ (Tokyo: Kokusho kankokai,
1975), pp. 410-412. For details of the Mongol-Koryo conflicts and the latter's

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128 SO KEE LONG

Contrasting with the overall deterioration of the Koryo trade,

maritime trade with Japan continued to develop . However, a
fundamental change was also taking place in this realm of trade.
Previously, Sino-Japan trade was predominantlyrun by the Chinese
merchants, including those from Chiian-chou. But by late twelfth
century this pattern was gradually replaced by a reverse flow of
Japanese voyages to China, and their eventual dominance in
the trade.30 Chao Ju-kua wrote that though the Japanese fre-
quented Ch'iian-chou and imported wooden boards of huge size,
Ch'iian-chou merchants seldom visited their country in return.31
The ov rseas markets to the south were now less stable than they
previously were. The power structure of Southeast Asia was just
undergoing significant changes. In the mainland, Champa, for-
merly a major trading partner of Ch'iian-chou, was subjugated by
the Angkor Kingdom which was in its heydays in early thirteenth
century. From 1220s on, although Champa was able to free itself
from decades of direct control by the Khmers who were now very
much preoccupied by the threat from the newly risen Siam, the
Chams were by no means free from conflict, but this time with its
strong northern neighbour Vietnam.32
In the meantime, another important empire Srivijaya, whose
nagaraPalembang used to be the central entrepot in southeastern
Sumatra controlling virtually all commercial shippings passing
through the Strait of Malacca, also began to lose its thalassocracy.
The rulers ofJava had gradually taken over the Maharajas' role in
the trade of South Seas. Still, time was not yet ripe to see the
emergence of a dominating maritime empire of Majapahit to
facilitate the traders with secure waters.33
internal power struggle, see William Henthorn, A Historyof Korea,(New York: The
Free Press, 1971), chap. 7; and Korea: The MongolInvasion,(Leiden: EJ. Brill,
1963).
30 Mori Katsumi, Nisso boeki no ,
kenkyu EHtg 0 FE (Tokyo: Kokusho
kankokai, rev. ed., 1975), pp. 235-279, 322-350. In 1251, an official in Kuang-
chou noted that about fiftyJapanese ships visited China every year. See Pao Hui
~', Pi-choukao-liiehf fli , (SKCSCP ed. Series II), 1: 18b. In the realm of
trade ceramics, one of the most important Chinese imports to Japan at the time,
similar trend can also be found. See Kamei Meitoku-'H4iS , Nipponboekitojishi no
kenkyuB-iWi
b{*v0t, (Kyoto: Dohosha, 1986), pp. 218-221.
ChaoJu-kua, op. cit., p. 90; Hirth & Rockhill, op. cit., p. 171.
32
George Coedes, tr. by Susan Cowing, TheIndianizedStatesof SoutheastAsia,
(Canberra: Australian National University Press, 1975), pp. 169-172; 181-182.
33
Ibid., pp. 178-180; 183-184; See also O.W. Wolters, TheFall of Srvijaya in
Malay History,(London: Asian Major Library, 1970), pp. 39-48. Interestingly, it
is argued that the decline of the maritime empire of Srivijaya has much to do with
the coming of Chinese maritime merchants to the Southeast Asian waters, which

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 FINANCIAL CRISIS & LOCAL ECONOMY 129

It is hard to determine how much the decline of Champa and

grivijaya affected the overseas trade in Ch'iian-chou. But since the
overseas trade in these places was conducted mainly between
maritime merchants and indigenous nobles, a stable overlordship
in the region would not only make efficient trade possible but also
provide the security of seafaring they badly needed. Therefore, it is
not difficult to envisage that drastic changes in the power structure
is likely to have led to loss of trade.
However, this kind of changes alone could also have been easily
absorbed by shifting the trading partners or opening new markets.
Had the Ch'iian-chou merchants maintained their dynamism these
would hardly have constituted unsolvable obstacles before their
determination to pursue profit, as clearly demonstrated in the
previous century. It thus seems that factors usually attributed to
the rise and fall of overseas trade are inadequate for an elucidation
here. Our question is then: Would there be any structural pitfall in
the local economy which would worsen the problem as those
unfavourable factors surfaced? I would postulate that the commer-
cialization of the local agriculture as well as the evolution of the
monetary system might have played a role not quite negligible.

3. DomesticTradeand Problemsin Agriculture

Agricultural specialization in coastal Fukien was in an advanced

state in the twelfth century. A certain proportion of farmland was
devoted to specialized cropping, so as to provide goods demanded
in trade. Imports of rice increased in response to population growth
and reduction of local rice output.34However, it was not until the
thirteenth century that this process accelerated to the extent that it
became a problem for the local agriculture.
This problem is explicitly illustrated in a piece of evidence widely
cited by scholars.35 Fang Ta-tsung, a scholar-official of P'u-t'ien
origin, wrote a letter to a prefect of Hsing-hua chiun called Hsiang
Po-wen 314: who was in office some time during the reign of
Chia-hsi (1237-1240). In this letter, Fang gave an important
account of agricultural specialization in this prefecture:

virtually weakened the hitherto monopoly of lucrative trade by the Maharajas.

3 So Kee Long, "Economic Developments in South Fukien, 946-1276,"
(Canberra: Australian National University, Ph.D. dissertation, 1982), pp.
162-168.
3 For instance, see Shiba, op.cit., 1968, p. 148. Mark Elvin also cites this as an
example of agricultural specialization in Sung-Yuan China. Elvin, op. cit., pp.
128-129.

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130 SO KEE LONG

These days, the fields of Hsing-hua have been taken over by rice of a high gluten
content [for wine-making], and there are I know not how many thousands of
piculs of it carried each year to the prefectural capital. The fields of Hsien-yu
county have been used up for sugar cane, and there are I know not how many tens
of thousands ofjars of the stuff transported each year to Huai-nan and Liang-che.
There can be no doubt that sugar cane is an obstacle in the way of rice
cultivation.36

There can be little doubt that Ch'iian-chou and its neighboring

areas on the southern coast of Fukien had developed a very com-
mercialized and specialized agriculture by this time, which was
much more intensive than it had been earlier.
On the other hand, as has been demonstrated by Ch'iian Han-
sheng and Shiba Yoshinobu, rice imports to this region, particu-
larly from the Kuang-nan circuit, were increasing throughout the
Southern Sung.37 Two other references by Fang Ta-tsung help
illustrate a booming interregional exchange. The first one is a letter
to Ho shih-yiS±~l, which tells that P'u-t'ien county could only
produce half the amount of rice locally consumed every year even
with good harvest; and that it relied heavily on rice shipment from
Kuang-tung.38The other is a notice to the people of Kuang-chou,
which was written during his term of prefect in that prefecture from
1242 to 1246, encouraging them to weave cotton cloth. It states:
Cotton cloth comes from Hainan and Ch'iian-chou, and is used for clothing by
people in Kuang-chou. Recently, some traders trading Ch'iian-chou cotton cloth
were arrested by the Office of Maritime Affairs because they were mistakenly
labelled as traders of Hainan cloth evading custom duty. I immediately cleared up
the case and released them. Although people in Ch'iian-chou are also planting
cotton, they rely mostly on the imported cotton from Hainan. In fact, ships from
Hainan come more frequentlyto nearby Kuang-chou than to remoter Ch'iian-chou.
If [people] in Ch'iian-chou can weave cotton for trade, there is no reason that
[you] cannot weave for [yourselves] ... If the weaving of cotton cloth can be
extended then all commoners in the countryside can have clothes to warm their
bodies. It is necessary to depend on the supply [of cotton cloth] from
Ch'iian-chou. ..39

36
Fang Ta-tsungJSM, T'ieh-anchiAVtI, (SKCSCP, Series II) 21: 4b. This
translation is by Mark Elvin, see Elvin, ibid., p. 129.
37 Ch'iian Han-sheng iAi,
"Nan-Sung tao-mi ti sheng-ch'an yii yiin-hsiao
1iX9
fff ) ,g^_," in Chung-kuoching-chi-shih lun-ts'ung m(Hong-
kong: Hsin-ya yen-chiu-so, 1972), vol. 1, pp. 284-291; Shiba, op. cit., 1968, pp.
161-162.
38
39
Fang Ta-tsung, T'ieh-anchi, 20: 13a/16a.
T'ieh-an chi, ch. 33. Cited by Amano Motonosuke X; tt_J, Chugoku
nogyoshikenkyurPii lf iS^E, (Tokyo: Ochanomizu shobo, Revised ed., 1979),
pp. 486-487. I cannot locate this reference in the SKCSCP edition of T'ieh-anchi

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 FINANCIAL CRISIS & LOCAL ECONOMY 131

Apart from import, it is clear that the region also produced its own
cotton.
Given these increasingly frequent exchanges of specialized pro-
ducts and foodgrains between southern Fukien and other circuits,
there is good reason to believe that domestic trade continued to
flourish. In other words, this would suggest that the commerce in
Ch'iian-chou and its hinterland was turning its emphasis from
overseas trade to domestic trade.
As demand for specialized crops remained high, and rice imports
remained profitable, and investment in overseas trade was becom-
ing less attractive, more resources are likely to have been diverted
into domestic trade. Yet, the commodities involved were primarily
agricultural products. One possible effect of this is a rise of interest
in land investment.
Prior to the thirteenth century, there is evidence that temples in
Ch'iian-chou and its hinterland were holding large quantity of
arable lands, and this facilitated the agricultural specialization
process in the region.40These large temple properties seem to have
remained in existence until the thirteenth century. Behind this
phenomenon, there is likely to have been a relatively low demand
for land. Before the thirteenth century, although land ownership
was a common target for merchants,4' commercial investments
probably still attracted a large part of the wealth derived from the
prosperous trade in Ch'iian-chou. The reason is simply that invest-
ment in commerce often brought much larger profits over a shorter
period of time. There is no direct evidence that people had rela-
tively less incentive for land ownership. But in 1170s, it was
recorded that some local powerful families planned to bid for the
tenancy of some temple fields in Ch'iian-chou, which were aban-
doned by the temples and confiscated by the government as public
property. However, their offer was so low that the tenants who had
previously cultivated the land for the temples could easily offer the
same rental.42This suggests that even the appetite of the rich and
powerful families for land was not very great. It may reflect a lack

to which I have access. For the time of Fang's term of office in Kuang-chou, see
Kuang-tungt'ung-chih,1822 ed., 16: lOa.
40 So, op. cit., pp. 93-95. See also Chikusa Masaaki / "Sodai Fukken
no shakai to jiin#S&Aio fnt-* I ," Toyoshikenkyuz 15: 2, (Oct. 1956): 1-26;
Huang Min-chih Vt , "Sung-tai Fu-chien ti ssu-yiian yu she-hui
IA R RAt+4 ;," Ssuyuiyen 16: 4, (Nov. 1978): 1-30.
41 Shiba, op. cit., 1968, pp. 461-465.
42 Chou Pi-ta W]Zt, Chou Wen-chung-kung ch'ian-chiWZ,O:X'it, (SKCSCP
ed., Series II) 67: 6b.

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132 SO KEE LONG

of strong incentive for land ownership among the rich in general.

Nevertheless, from the start of the thirteenth century, the land
distribution pattern began to change. There was a rapid concentra-
tion of land into the hands of the powerful local families. This
change was described clearly in Chen Te-hsiu's memorial of 1233
mentioned above, concerning the request for monk certificates:
During the last twenty to thirty years, most of the lands belonging to temples and
public fields were illegally occupies by the powerful families. When land transac-
tions took place, people often put down the estimated value before the deal was
made, [so as to pay less land tax to the government] ... Consequently, the regular
revenue decreased a lot.43
Another source indicates that in the early thirteenth century pow-
erful local families from a neighbouring prefecture (most likely
Ch'iian-chou) were illegally occupying a great deal of temple
property in Chang-chou and evading tax.44 By the end of the
dynasty, some powerful families must have owned considerable
quantity of lands. A revealing example is that around 1270, the
Ch'iian-chou administration confiscated lands from two local clans,
the Wengs H and the Lins 4, which yielded an annual grain output
of 10,000 tan.45
What are the implications of this phenomenon of concentration
of land holdings by the local powerful families? The increasing
interest in land taken by these powerful families may have been a
result of the diminishing returns for investment in overseas trade,

43 Chen Te-hsiu,
op. cit., 15: 13a/b.
44 Yung-ch'un hsien-chih7-k,l, 1526 ed., 9: 16a. This is a biography of a
Chang-chou prefect named Chuang Hsia Fit of Yung-ch'un origin. Chuang held
the office in 1213. See also Chang-chou fu-chihM'Jl'lfi, 1878 ed., 24: 15b/16a.
Contrary to this, another source-a letter to the Prefect of Chang-chou by a
Neo-Confucian scholar named Ch'en Ch'un ig- in 1211-gives a different pic-
ture. Ch'en states in his letter that six-sevenths, i.e., about 85 per cent, of the
registered farmlands in that prefecture were owned by the temples. See Ch'en
Ch'un, Pei-ch'ita-ch'ian-chiIL'ki~±, (SKCSCP ed., Series IV) 43: 10a/b. But in
another letter to the prefect by the same scholar at approximately the same time,
he gives the proportion of 75 per cent. It thus seems that he did not necessarily
have accurate information concerning temple land holdings, but gave merely an
impressionistic estimate. Moreover, after reading his fierce criticism of the tem-
ples, one cannot but wonder whether he made those statements free of bias and
exaggeration. A more cautious conclusion which can be drawn from Ch'en's
document is that the temples in Chang-chou probably still held large properties
this time. But their decline was just about to begin, as is indicated in Chuang
Hsia's biography.
45 Wen
T'ien-hsiang I7< , Wen-shanhsien-shengch'iian-chi ;L[B t-% ,
(SPTKCPSP ed.) 11: 231a/233a.

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 FINANCIAL CRISIS & LOCAL ECONOMY 133

or of the increasing risks in domestic trade, which will be discussed

later. In any case, the demand for land was rising. And due to the
social and political influence these powerful families had, many of
them succeeded in avoiding registration and taxation. Perhaps this
helps to explain the decrease in land tax revenues which adversely
affected the local government's finances.

4. Changesin the MonetarySystemand TheirEffect on theEconomyof

Ch'iian-chou

The monetary system of the Sung dynasty is too vast a subject to

be discussed in detail here. What really concerns here is the effect
of this system and its development on the economy of Ch'iuan-chou,
especially during the period in question.
During the Northern Sung, copper coins constituted the bulk of
currency in southern Fukien, as in other parts of the empire.46
Although a kind of paper money called chiao-tzu' had been
developed in Szechuan, and later in other parts of North China in
the eleventh century, there is no evidence that Fukien also fell
within its circulation zone.47In this sense, the monetary system in
Fukien was able to remain simple by relying on a single metal
currency until the mid-twelfth century. In 1045, there had been an
unsuccessful attempt to introduce a dual-currency system com-
prising iron and copper coins there. It was a Fukien Commissioner
for Transport named Kao 1-chien AM who privately decided to
establish an iron-coin mint in Ch'iian-chou because of a boom of
iron mining there. Kao's idea was to circulate iron coins in that
prefecture so that more copper coins could be circulated in inland
prefectures. In fact, using low quality metal coins to spare the
precious copper coins was not a totally new idea in this region. A
similar measure had been adopted by the Min kingdom during the
Five dynasties and proven successful in retaining a quantity of
copper currency amid flourishing interregional and overseas

4 For a general picture of the monetary system of the Sung dynasty, see P'eng
Hsin-wei 1A' , Chung-kuohuo-pishihF4'IM t, (Shanghai: Shanghai Jen-min
ch'u-pan-she, 1958), Chap. V.
4 Kat6 Shigeshi t , Shina keizaishi kosho ; (Tokyo:
Toyobunko, 1953), v. 2, p. 73. For details of the history of chiao-tzu,see Hino
Kaisabur5 F r 1 "K6shi no hattatsu ni tsuite T+ aRA " Shigaku
zasshi 45: 2 (Feb. 1934): 188-220; 45: 3 (Mar. 1934): 359-384; Chu Ch'i*ff,
"Liang-Sung hsin-yung huo-pi yen-chiu 1i9 4HJW ," Tung-fangtsa-chih35: 5
(Mar. 1938): 25-33; 35: 6 (Mar. 1938): 28-30; P'eng, ibid., pp. 280-290.

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134 SO KEE LONG

trade.48The reaction of the Sung court against this locally initiated

action was however very unfavourable for reasons not known to
date. Consequently, Kao was demoted.49
As the region relied almost entirely on copper coins, another
problem arose, and that was the problem of coin drainage, which
has already attracted the attention of many scholars.50It is gener-
ally accepted that a regulation prohibiting the use of copper coins
for overseas trade had been enforced during the early Northern
Sung, but was abolished in 1074. Consequently, the drainage of
copper coins accelerated and helped to create a serious shortage of
coins in the empire. Although imperial orders of prohibition were
later repeatedly issued many times during the remainder of the
Northern Sung and throughout the entire Southern Sung, the
regulation was seldom effectively enforced.5' What happened in
southern Fukien, within this broader historical trend? Since over-
seas trade was one of the major avenue of coin drainage, and the
economy of this region was so dependent on overseas trade, it is
almost certain that copper coins drawn from this region must have
been shipped overseas in very large quantities.
In the twelfth century when the prefecture prospered in com-
merce, the siphoning off of large quantities of coins for overseas
trade did not seriously affect the supply and circulation of that
coinage in the locality. The reason is that, by re-selling the valuable
exotic goods which Ch'iian-chou merchants obtained overseas,
they could often earn back a lot more copper coins from elsewhere
in China. Another important factor is that, although there was
foreign participation, the trade was mainly conducted by the locals.
The profits the merchants made were thus largely concentrated or
reinvested in the local economy. This led to a sufficient inflow of
currency from other regions to southern Fukien. As noted by

48 Miyazaki Ichisada W'gi1iS, GodaiSoshono tsuika mondai-t jXjo)LA NmF

(Tokyo: Hoshino shoten, 1942), pp. 93-117.
- Sung-shih,180: 4380.
50 For instance, Kuwabara, op. cit., pp. 32-35; Sogabe ShizuoF1&
I "S6
no senko * o ," Bunka 3: 3 (Mar. 1936): 323-336; Ch'iian Han-sheng,
"Sung-tai Kuang-chou ti kuo-nei-wai mao-yi t in Chung-kuo
ching-chi-shihyen-chiu'FRiMi
0 I,5 (Hongkong: Hsin-ya yen-chiu-so, 1976), v. 2,
pp. 112-127. For tremendous quantity of Sung coins imported to Japan in Sung
times and its impact on theJapanese economy, see also Mori Katsumi, Zokuzoku
Nisso boekino kenkyiMP HFi5M IE, (Tokyo: Kokusho kankokai, 1975), pp.
pp. 474-489.
137-149; 157-201; Nisso boekino kenkyui,
5 Ch'iuan, ibid., p. 113; Sogabe, ibid., pp. 332-335; P'eng, op.cit., pp.
326-328.

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 FINANCIAL CRISIS & LOCAL ECONOMY 135

Ch'iuanHan-sheng, the consequence of coin drainage in the North-

ern Sung, which led to a considerable decrease of circulating
copper coins, was a recession in commerce.52This, however, did
not occur in Ch'iian-chou and its hinterland, where, unlike most of
the empire, commerce continued to grow.
From the mid-twelfth century, significant changes in the mone-
tary system began to take place. These included the introduction of
a paper currency called hui-tzu *- into the eastern part of the
empire, including Liang-che and Fukien. This meant that from
then on Ch'iuan-choumerchants had to use two kinds of money in
local transactions, in domestic interregional trade, and even in
payments of tax. Even more importantly, the region was now
affected by the instability of the exchange rate between the copper
coins and the paper money, and by the changes in their purchasing
power.53
To elaborate this point, let us assume that in domestic trade, half
of all transactions were conducted using paper money. This would
mean that half the profit the Ch'iian-chou merchants made by
re-selling exotic goods to other regions in Sung China would be
converted into paper money. On the other hand, as paper money
was not circulated in any overseas markets, it could not be used in
overseas trade at all. The simple consequence was that coin drain-
age overseas was greater than the inflow of coins in the total
balance of trade in this region. The region was thus gradually
exhausting its copper coins.
It did not bother the Ch'iian-chou merchants immediately,
because the value of paper money, i.e., its exchange rate relative to
copper coins and its purchasing power, was kept at a constant level
both officially and privately until the end of the twelfth century.
However, from the turn of the century the value of notes could no
longer be maintained and the paper money started to depreciate
rapidly.54Depreciation of money leads to inflation. In thirteenth-
century Sung China, the depreciation of paper money clearly
brought about serious inflation in the first three quarters of the

52 Ch'iian, ibid., pp. 123-125.

5 Chu, op. cit., pp. 30-33; Sogabe Shizuo, Sodaizaizeishi 5H ORt (Tokyo:
Da'an kabushikikaisha, 1966), pp. 269-296. There is evidence that apart from the
bureau of paper money in Hangchou, there was another branch bureau in
Ch'iuan-chou towards the end of Southern Sung, which also issued hui-tzu-for
regional circulation. Sogabe, p. 278.
5 Ch'iian Han-sheng, "Sung-mo ti t'ung-huo p'eng-ch'eng chi ch'i tui-yiu
wu-chia ti ying-hsiang5MA RW," in Chung-kuoching-chi-
shih lun-ts'ung,v. 1, pp. 325-326.

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136 SO KEE LONG

century.55But at the same time, copper coins, also an essential part

of the currency, were becoming rarer and more valuable. This was
the result of a combination of decreased minting and continuous
drainage overseas.56
Whether or not it may be said that overseas trade was declining
in this period, the outflow of copper coins from Ch'iian-chou did
not stop. This was partly because non-resident foreign merchants,
such as the Japanese mentioned earlier, still came to trade in this
port. Overseas trade of this sort was by no means highly profitable
to the locals, but resulted in continuous coin drainage.57Moreover,
in order to maintain adequate rice import it could hardly do
without now, the region had to use a considerable quantity of coins
in the domestic trade.58The situation that is likely to have existed
in Ch'iuan-chou under these circumstances is one in which coins
were becoming more expensive, and the prices of goods, which
were measured and paid by paper money, were rising sharply. This
is exactly the effect of coin drainage observed in the dual-currency
system of the Southern Sung by Ch'iian Han-sheng.59
For the merchants, such an unstable monetary system would
certainly have had a severe negative effect on their business. It
means that they now had to take much greater risks in trade,
whether overseas or domestic, and also in providing capital for
trade. This increasing instability can be detected in the rising
frequency of bankruptcy among merchants and the increasing
motivation to possess land.

Conclusion

From the above discussion, it is clear that the prevailing view that
Ch'iian-chou enjoyed continuous prosperity from Southern Sung to
Yuan needs further qualification. The seaport had lost its leading
economic position on the China coast for almost three quarters of a
century before the Mongol conquest. At the first glance, this

Ibid., pp. 325-354.

56 On the decrease in minting, see SungHui-yaokao, shih-huoR , 11: lb.
57 Pao Hui, op. cit., 1: 19a/b.
58
There is evidence that, in the early thirteenth century, Ch'iuan-chou alone
paid 1,400,000 to 1,500,000 strings of cash annually for rice imported from
Kuang-chou. All payment was solely in cash coins. See Ho Chiung fJT'Red.,
Ch'ing-yiianwen-hsien*MMMM, (Edition collected in the Fu-chien Provincial Li-
brary) 16: lOa/b.
5 Ch'iian, "Sung-tai Kuang-chou," pp. 125-127.

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 FINANCIAL CRISIS & LOCAL ECONOMY 137

becomes manifest in the financial crisis of the local government and

the decline of overseas trade.
Many factors can be used to account for the fall of overseas trade,
and hence for the financial crisis. These include excessive tariff,
corruption, piracy, unstable political climate in certain important
trading partner countries overseas, competition from foreign mer-
chants and so on. Nevertheless, all these factors were either in
existence ever since the seaport began to prosper, or not particu-
larly acute at the time when it declined. Therefore, potential
problem in the regional economy should also be taken into consid-
eration.
There is no denying that agricultural commercialization can be
conceived a sign of economic progress in traditional agrarian
society. However, when the agricultural sector of a highly commer-
cialized local economy like that in Ch'iian-chou and its hinterland
was overheated by the commercialization process, it began to
create a booming domestic commercial sector and an ever-growing
appetite of landholding. It seems that both contributed to under-
mine the dynamism of the overseas trade, which was in fact the
most vital sector accounting for the prosperity of the region.
Worsening still was the uncontrollable inflation of paper money
developed from the last decades of the twelfth century, which
further disrupted the foundation of the overseas trade sector. On
the one hand, commercialization did bring about prosperity to the
Ch'iian-chou economy. On the other, its excessive development in
the thirteenth century may well have been the crux of the seaport's
recession.

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