History of Money and Financial Crises in China

 In Chinese characters, those describe something of value often include a part, 贝, which is the character for seashells. (货, means commodity;贵, means valuable, expensive; 资, means wealth, 资产 as a word means asset.) Therefore we can deduce that the first money used in China was shells. Later when the supply of seashells could no longer keep up with the demand as the trade started to grow, Chinese people started to cast copper into the coins with the shape of shells as a substitute.

Since 206BC, the first few emperors of Han Dynasty distributed the power of casting money among several vassal states. However the vassal governments abused this power, and caused a series of problems. The confusion about the standards of coinage, and the inflation caused by the excessive amount of coins casted by the local government, those had been threating the revenue of central government. Therefore the sixth emperor of Han decided to unify the standards of coinage and collected the power of casting coins back to central government. This kind of coinage, 五铢钱, was later adopted by other dynasties and used for more than 600 years. (五,five; 铢, measurement of weight, 1 unit of铢 equals 0.65g; 钱,means money.) At the time, it even had effects on the coinages of other countries like Japan, Korea and Thailand.