Many studies of the history of Chinese finance lack systematic empirical investigation, are limited to the period before the outbreak of war in 1937, or focus on Shanghai, skewing our understanding of the full scope of Chinese finance in this period. This chapter draws heavily on new work, as well as on the empirical work of the two authors, though many areas for further research remain.

At the turn of the twentieth century, Chinese scholars eager to assimilate the historical sciences of the West and incorporate their history into universal historical narratives readily adopted the tripartite periodization of Western civilization divided into ancient, medieval, and modern epochs. This framework of linear, stadial progression toward modernity offered liberal intellectuals in China the promise of emancipation from China’s stultifying past and rebirth as full citizens in a modern world of equal nation-states. Marxist scholars invoked a parallel tripartite periodization divided into slave, feudal, and capitalist epochs, but adapted to accentuate the defining feature of Chinese history: the rise of a “bureaucratic, centralized feudal state” that fostered “economic stagnation” throughout the longue durée of the imperial era, from the first universal empire of Qin in the third century bce to the irruption of Western imperialism in the nineteenth century.1 The ideas of “oriental stagnation” and the “Asiatic mode of production” likewise inflected Western historiography on China, and the notion of an unchanging “traditional China” prior to the advent of the West in the post-Opium War era predominated in Western scholarship on Chinese history down to the 1970s.

Foreign trade always mattered in imperial China. Especially during the middle period and early modern times, China experienced enormous growth and expansion of foreign trade. According to Confucian concepts, merchants belonged to the lowest echelon of society; agriculture, not trade, was considered the basis of a stable state and society. Most Chinese governments indeed sought to maintain more or less strict control over foreign commerce and those who were responsible for it. But one has to emphasize the co-operative rather than antagonistic relationship with markets and with the merchant class during most of China’s imperial history. In addition, we can observe certain characteristics and qualitative changes throughout the centuries.

Money serves as a means of exchange in any society and in any period. However, depending on place and time, money exhibits distinct characteristics. Chinese imperial monetary history spotlights a blind side about money that mainstream thinking overlooked. Chinese historical experience is replete with examples of money use transcending the theoretical frameworks of those who attribute the acceptability of money to its intrinsic value as well as those who emphasize enforcement by public authorities. Chinese monetary history may appear highly irregular from the viewpoints of contemporary foreign observers and modern social science, but a coherent system surely existed in an endogenous way behind the apparent disorder.

Over the past two generations a fundamental change has taken place in the scholarly understanding of the commercial world of late imperial China. Lasting from the Song (960–1279) to the end of the Qing dynasty (1644–1911), this millennium of Chinese history had long been judged a period of decline, its initial economic breakthroughs never fulfilling their promise. The commercial and technological innovations of the eleventh and twelfth centuries were thought to have given way to economic stagnation and cultural conservatism, as the enterprising peasantry and merchants of south China lost out to the prerogatives of Confucian scholar-officials and their state-sponsored culture in the Ming (1368–1644) and Qing dynasties. Tested by a highly competitive examination regime and thereafter sheltered by a host of privileges, these scholar-officials acquired and retained an unrivalled hegemony that was cultural, political, and, some would add, economic. When China suffered a severe economic downturn during the nineteenth and twentieth centuries, the once-admired stability of the Qing regime was criticized for its backwardness, and the late imperial economy of these scholar-officials’ rule was condemned for its stagnation.

Modern legal systems are by and large very similar across most countries on earth. A widespread opinion ascribes this similarity to common heritage from Roman law, because this law (as codified under the Roman emperor Justinian 529–34 CE) was so useful. This is not, however, fully correct. Countries living under law originating in Europe share the same methods of legal argumentation, share many principles and categories, and also have a vast mass of procedural rules and substantive law in common. That conformity, however, did not come about by directly adopting legal rules or doctrines from Justinian. Instead, Christians all over Europe lived under the learned canon law of the Roman Church, whose lawyers from the late twelfth century adopted doctrines of medieval Roman law whenever there existed no appropriate ecclesiastic rules. Roman law regained importance in the Middle Ages through canon law; this is why Roman doctrines so often still survive.

Marriage posed problems of immense complexity for medieval canonists. They had the unenviable task of providing guidelines for how to partake in a complex, weighty, and dangerous matter. Marriage was considered sacred, divinely sanctioned, but at the same time it was all too worldly, rife with the risk of committing grave sins. Competing notions of how best Christians should marry in compliance with the teachings of the Old and New Testaments posed problems enough to cause endless difficulties for canonists. Even more problematic, if anything, was the fact that marriage was of immense importance in their society, a bedrock of social, economic, and political organization. All this led to myriad competing concerns. The solutions posed by medieval popes and canonists have had a mixed reception. They certainly failed to impress sixteenth-century reformers.

When Gratian’s Decretum took its final shape in the mid-twelfth century, one of its three major parts, the Tractatus de consecratione ecclesiae, focused on sacramental law. De consecratione, added in the second recension, reflects the theological climate of the time, when theologians defined seven sacraments: baptism, confirmation, penance, the Eucharist, holy orders, matrimony, and extreme unction. Previously, the sacraments had occupied only a modest place in the canon law, with exceptions like the Decretum of Burchard of Worms and the collections ascribed to Ivo of Chartres. De consecratione was divided into five distinctions, focused on churches, the Eucharist, and baptism. The text exposed students to the concept of the Real Presence of Christ in the consecrated bread and wine, reflecting the theologies of the previous century and the Gregorian Reform’s critique of simony, buying and selling spiritual gifts.