Following Edward Kaplan's heroic translation of Peng Xinwei's classic A Monetary History of China in 1993 and Francois Thierry's voluminous numismatic catalogue of 1997, Niv Horesh's new monograph is the third recent book in a Western language that promises to present a history of money in China from its beginnings to our time.Footnote ¹ The author has conveniently condensed his account into five historic junctures. The general picture that emerges prior to the twentieth century is rather gloomy, even as the two earlier junctures fared well initially.

In chapter 1, Horesh argues, undeterred by the lack of other than “circumstantial evidence” (p. 36), that by accepting the concept of round coin from West Asia via “stimulus diffusion” (p. 24) in the fourth century BCE China became part of global monetary developments. In the following chapter, China is also portrayed as showing true monetary innovation, which started in the Tang dynasty and culminated in the invention of paper money in the Song dynasty and its efflorescence under the Mongol Yuan (chap. 2). But these two achievements were eventually doomed. Base metal coinage not only returned but lingered on for too long, setting China apart from the rest of the world. Government-issued paper money departed too early in the Ming dynasty, following repeated failures to maintain the necessary specie reserve. This eventually resulted in the familiar Qing dynasty bimetallic monetary system of silver bullion and bronze coin wherein strictly private and highly localized paper instruments played only a minor role (chap. 4). The two later junctures were in fact missed opportunities. Diverging from the much-debated discovery of Latin American silver in the sixteenth century, Horesh argues in chapter 3 that China already had lost its comparative advantage to Europe by the twelfth century due to the failure to update its mining and minting technologies and to understand global trade, thus finding itself at the mercy of foreign-directed global bullion flows when its monetary system shifted towards silver three centuries later (see also pp. 215–16 of chap. 7).Footnote ² Compared with Japan or Siam, China again failed to establish monetary sovereignty in the nineteenth century, resulting in a proliferation of foreign banknote issues on Chinese territory well into the 1930s (chaps. 5 and 6 on British and Japanese banknote issuance). Only the People's Republic of China founded in 1949 finally “managed to restore faith in Chinese government-issued currency” (p. 219), led China out of its state of acute monetary fragmentation, and is now gradually creating new international functions for its currency, the renminbi (RMB) (chap. 7).

The centerpiece of Horesh's book, according to the author's own introduction (pp. 6–7), are chapters 5 and 6 on nineteenth- and early twentieth-century British and Japanese banknote issuance in China. The superiority of British and Japanese banking owed much to the regulatory power of their respective governments, which enforced a higher specie reserve ratio and thus enabled the banks to instill impersonal trust in their clientele. The author's position is strictly chartalist, and he is no friend of Hayekian “free banking” (cf. p. 130). Qing China, with its monetary fragmentation, highly localized and personalized networks of trust, and frequent bank failures, epitomizes a state of disorder created by the lack of government oversight and control in monetary matters (chap. 4).Footnote ³ Not the invisible hand of the market but only the visible hand of government, even if located in colonial centers thousands of miles away from their banknote-issuing peripheries, could potentially provide salvation from monetary chaos. That said, foreign banks were not able to overcome monetary fragmentation in China proper. By the 1920s their presence had become an anachronism, and their business was severely curtailed by the anti-foreign boycotts in 1919 and 1925–26, when calls for the abolition of foreign bank privileges became louder (described in detail on pp. 168–80, 190–96, 204–5).

Although well researched and convincing, the two cases appear too similar to deserve two chapters in a book that spans 2,600 years of history, even more so as chapter 5 is a summary of the author's 2009 monograph entitled Shanghai's Bund and Beyond.Footnote ⁴ Moreover, Horesh's account is written from the perspective of the foreign banks and does not quite live up to the promise to “survey the formative impact British [and Japanese] banks had on the Chinese monetary trajectory” (p. 183). The reader learns little about China's monetary developments in the twentieth century before the introduction of the RMB. The crucial monetary reforms of 1935 that demonetized silver, established a legal tender banknote (fabi), and banned foreign banknote issuance in China are only touched upon in passing (pp. 190, 194, 195, 204, 218). The scholarly debate about the impact of the American Silver Purchase Act of 1934 and the vital role of the U.S. dollar in backing Chinese paper money years before Bretton Woods are not even mentioned.Footnote ⁵ Even if the fabi reform eventually fell prey to the disaster of war, such lacunae leave a void in a book whose professed goal is to show that China, far from being exceptional, was part and parcel of a “global progression” (p. 2) from metallic coinage to coinage supplemented by paper money to an abstract notion of credit and the nation-state as ultimate arbiter of money.

The book would also have profited from some editing for consistency. Two examples, among many, stand out. While discussing Kuroda Akinobu's argument,Footnote ⁶ Horesh suggests that “the scale of silver outflow from China to the west under Mongol auspices should perhaps be qualified” (p. 108), but once he develops his theory of an early Great Divergence, he takes as a given that “the scramble for New World gold and silver had been long preceded by an outflow of silver from China in the thirteenth century” (p. 116). Elsewhere, the export of coin to East and Southeast Asia is discussed as a reason for “coin famines” within China in chapter 2 (pp. 49, 50, 57), while in chapter 7 it suddenly becomes a historic precedent for the internationalization of the RMB (pp. 210–15), even though in the age of international reserve currencies an economic windfall rather than a dearth should be expected from the latter case.

Despite these caveats, the author bases his argument on an extensive reading of secondary literature available in English, Chinese, and Japanese. The strongly discursive style could make the book a somewhat challenging read for undergraduates, but it still provides a valuable overview of the state of research and questions raised in the field. The author also offers a number of fresh interpretations that place China's monetary history firmly within a global context and create an impetus for further inquiry.