Ancient China Lesson for Kids: Money & Economy

Instructor: David Wilson

David has taught college history and holds an MA in history.

The people of ancient China invented money as we know it today, first producing coins and then printing paper money. Learn about the influence of the ancient Chinese economy in this lesson.

China and the Economy

If everyone in your class pulled out all the money in their pockets, how old do you think the oldest coins would be? Maybe 20 or 30 years old, and perhaps one or two would be even older. The first coins, however, are much, much older. Coins as we know them were invented in China some 3,000 years ago and have been used in various forms around the world ever since. Let's learn more about ancient China's coins and other parts of its economy--its system of trade and money.

The World's First Coins

We know that the first metal coins to come onto the scene in human history appeared in China at the end of the Shang (rhymes with 'rang') Dynasty about 3,000 years ago. Before this, Chinese traded with other objects, including shells.

The first metal coins, made out of copper, made trade easy because they could be exchanged for anything and were easy to carry around. They called these coins Ban Liang quin, which just means a coin from Ban Liang.

Ancient Chinese coin
Han coin

Most Chinese coins had a round shape and, in the center, a square hole. The Chinese minted their coins (stamped the coins from metal) with these shapes to represent heaven and Earth--it was believed that heaven is round and Earth is square.

Tax Time

Ancient China was also a pioneer in the concept of taxation, which is when the government collects money from its people to fund projects and pay government officials. A farmer would have to pay one-tenth of the food he grew as taxes. To make sure enough food was being produced and there was enough tax being paid, the government would give a man fields for planting and harvesting at the age of 20. At the age of 60, however, the man would have to return the fields back to the government.

We know a lot about taxes in ancient China because they kept lots of records. What's more, we know that the government spent a lot of that tax money on its officials--there were about two dozen levels of government officials, each with their own pay grade.

Trading Blocks

Ancient China also greatly affected world trade. One of the most successful trade networks for exchanging goods and money is remembered as the Silk Road, a trade route running from China through all of Asia and into Europe. Since Europeans couldn't make their own silk or grow their own spices, they had to trade from very far away to get them.

Painting of silk trade in ancient China
Silk Road painting

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