An Encyclopaedia on Chinese History and Literature

Yuan-Period Economy

The Mongols were aware that exploitatation by taxes and trade would be much more profitable for them than simple raids. They adopted the two tax system in use since the Tang Dynasty; in the north, a poll tax (dingfu 丁賦) combined with the triple tax in grain, material and corvee labour was in use; for the south, the Mongols used the twice-taxation system (liangshuifa 兩稅法), the peasants being taxes two times a year with a real-estate tax and a profit tax. They had no interest in abandoning the large land estates of south China. To ensure the nourishment of the north, the Mongols began with the reconstruction of the Great Canal (da yunhe 大運河) from the Yangtze valley to Khanbalik. Maritime trade was nevertheless still important. Technical improvement in open sea navigation during the Song Dynasty 宋 has made it possible to ship around the South East Asian archipelago to India and Arabia and vice versa. The vast Mongol empires in Inner Asia, the empire (ulus, "hord") of Čaqadai in modern Kazakhstan, the Il-Qaγan in former Persia, and the Golden Horde (Qibčaq) in south Russia, opened the trade routes to West Asia. Merchants, missionaries and diplomats from Europe and the Near East followed the caravan routes to the empire of Qubilai. The Mongols preferred Inner Asian people and trusted them much more than the Chinese.
Yuan coin Dayuan tongbao 大元通寶 in Mongolian letters (Baghsba script) The merchant Marco Polo reports to have been installed as a governor. Franciscan patres traveled to the court of the mightiest man of the earth, like Piano Carpini, Giovanni Monte-Corvino and William Rubruk, but we have also the reports of an Arab traveler named Ibn Battuta who visited Mongolian China. But the migration of people also went to the other direction. Chinese merchants came to Russia, Chinese military technicians and engineers came to modern Irak when the Mongols devastated the blooming Arab cities. An intensive exodus of Chinese people to the southern sea also lead to the first foundations of Chinese communities in South East Asia, in Vietnam and later Singapur. The profit from the trade along the Inner Asian caravan routes went into the hands of the Mongol ruling elite and did not contribute to ensure the wealth of the common Chinese people. The difference between rich and poor widened during the Mongol rule; this was one reason for the end of the Yuan dynasty. Another reason was that the general economic situation worsened at the begin of 14th century. Having been stable for a long time, the nationwide introduced paper currency suffered from a fast inflation.
Because the Great Canal was not sufficient to transport enough tax grain and clothing and other commodities to the northern capital, the transport by sea route became essential since 1282. Main port for the shipping was Pingjiang 平江 (modern Suzhou 蘇州/Jiangsu) where tax grain of the surrounding areas was collected and then transported to a harbour, Liujiagang 劉家港 (modern Liuhezhen 瀏河鎮/Jiangsu), and shipped along the coast around the Shandong peninsula to the north were it arrived at Zhigu 直沽 (present-day Tianjin) from where it was shipped through canals to the capital. The highest annual transport volume were 175.000 t of grain one year. The whole transport was regulated by a transport office (caoyun shisi 漕運使司). Navigation technology was a great importance for this undertakings, and the high level of navigation skills during the Yuan period is evident.