Economy of The Song Dynasty

Economy Of The Song Dynasty

The economy of China under the Song Dynasty (960–1279) of China was marked by commercial expansion, financial prosperity, increased international trade-contacts, and a revolution in agricultural productivity. Private finance grew, stimulating the development of a country-wide market network which linked the coastal province with the interior. The Song economy gave rise to an enormous population explosion, stemming from increased agricultural cultivation in the 10th to 11th centuries that doubled China's overall population, which rose above 100 million people (compared to the earlier Tang, with some 50 million people).

Under the Song dynasty there was also a notable increase in commercial contacts with the outside world, with merchants engaging in overseas trade through investments in trading vessels, which undertook trade at ports as far away as East Africa. This period also witnessed the development of the world's first banknote, or printed paper money (see Jiaozi, Huizi), which was established on a massive scale. Combined with a unified tax system and efficient trade routes by road and canal, this meant the development of a truly nationwide market in China. Although much of the revenue in the central government's treasury was consumed by the needs of the military, the taxes imposed on the rising commercial base in China refilled the monetary coffers of the Song government. For certain production items and marketed goods, the Song government imposed monopolies in order to boost revenues and secure resources that were vital to the empire's security, such as chemical components for gunpowder.