From Chengdu to Stockholm: A Comparative Study of the Emergence of Paper Money in East and West

Abstract

It is widely recognised that monetary paper instruments appeared in China earlier than in the West, paper itself having been invented there during the Han era. However, there have been to date few direct scholarly attempts to place the early-modern Western and pre-modern Chinese formative experiences with paper money in detailed comparison by way of attaining a better understanding of the evolution of money as a whole. This article aims to make a tentative first step toward bridging this scholarly gap. It will survey in particular the extent to which the inception of Chinese paper money in 11th-century Chengdu differed from the circumstances in which European paper money emerged. Whilst some similarity between 17th-century Stockholm and 11th-century Chengdu might arguably be traced back insofar as the emergence of paper money is concerned, British banknote issuance subsequently took on new important functions. These, in turn, ushered in our modern "national-debt" economy.