The Han Economy: Farming, Taxation, Production and Trade

From the founding of the Han dynasty in 202 BCE to its end in 220 CE, farming supplied most people’s livelihoods and much of the state’s revenue. Yet the economy was not simply a collection of self-sufficient farms. Households sold crops and handmade goods, landlords organized production on larger estates, merchants moved supplies between regions, and governments collected taxes in grain and coin while directing labor and some industries. The balance between these activities changed over time. The Western Han lasted until Wang Mang established the Xin regime in 9 CE; Han rule returned in 25 CE as the Eastern Han, with its capital at Luoyang rather than Chang’an.

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Agriculture, households and landholding

Farm households grew staple crops including millet, rice, wheat, beans and barley. Many also raised animals, tended gardens and made goods for household use or sale. Rural women commonly wove clothing for their families. Silk production, which required raising silkworms and processing their cocoons, could bring income to both small farmers and large-scale producers, although silk clothing was beyond the means of many poorer people, who more often wore hemp cloth.

Landholding varied. Some cultivators owned and worked small farms, while others rented land from wealthy owners and paid rent with a portion of their harvest. Landowners could also hire agricultural workers. A household that owned its land might still be vulnerable: a poor harvest, taxes or debt could force its members to sell land and become tenants or hired laborers. Officials writing about farming described how narrow the margin could be between a household’s harvest and the resources it needed to survive.

Large estates connected farming with trade. Their managers could sell produce and other goods, and estate workers might cultivate fields, tend livestock, gather mulberry leaves or make cloth. Some wealthy landowners provided tenants with land, a house, tools and draft animals in return for a share of the crop. In this way, agricultural output could support both the household that did the work and the estate owner who supplied resources or controlled the land.

Taxes and compulsory service

The government drew revenue from agricultural land, individual taxpayers and property. Land tax was generally paid in a portion of the harvest. In the Western Han, the crop levy was reduced in 168 BCE from one-fifteenth to one-thirtieth, suspended the following year and restored at one-thirtieth in 156 BCE. In the Eastern Han the rate initially stood at one-tenth, but was reduced to one-thirtieth in 30 CE. Late in the dynasty, the land levy was lowered further, while poll and property taxes were raised to make up some of the lost revenue.

A poll tax was a payment assessed on individuals, rather than on the size of their harvest. Rates could reflect a person’s status: merchants, for example, faced higher poll taxes than most other adults. Property taxes also applied to merchants and their assets. The system gave the state more than one way to claim resources from households and commercial activity. It also meant that a farming family might owe both part of its crop and payments in coin.

Taxes were not the only obligation placed on rural people. Under the Western Han, peasants between the ages of fifteen and fifty-six were liable for a month of labor service each year, often on construction or maintenance projects. Men also faced military duties: they were drafted for training and active service and remained liable for service for many years. In the Eastern Han, some people could pay a commutation tax instead of performing annual labor, and military service could likewise be avoided through a substitute payment. These arrangements brought money into the state while making the provision of workers and soldiers less dependent on direct household service.

Public works linked these obligations to economic activity. Laborers built and repaired roads, bridges and canals, which served administration and military movement as well as commerce and agricultural transport. The state thus relied on the same rural population for food, tax payments and labor, while infrastructure helped move both official supplies and goods between places.

Coinage and state revenue

Coin became increasingly important for trade and taxation, but Han monetary policy changed repeatedly. Early in the dynasty, Emperor Gaozu permitted private coin production after closing government mints. Later rulers alternated between allowing private issues and bringing minting under state control. The bronze wuzhu coin, introduced in 118 BCE, became a durable standard. In 113 BCE the central government closed local commandery mints and reserved the right to issue coinage to the central state. A commandery was a regional administrative district.

Wang Mang’s Xin regime introduced a series of new currency forms and denominations, including knife-shaped money. These changes unsettled the monetary system; the wuzhu coin was restored in 40 CE, during the Eastern Han. Coin allowed people to pay some taxes and buy goods without transporting bulky harvests. Farmers could obtain it by selling produce or household goods, or by working for wages. The state, in turn, could use monetary taxes to fund government activity and purchases.

Cash did not replace grain as a measure or resource. Taxes could be collected in crops, and official salaries could include both cash and grain. Governments also intervened directly in the grain market. In 110 BCE, the Western Han established a system under which officials bought grain when it was plentiful and inexpensive, then stored or moved it for sale where supplies were scarce. The policy aimed to limit sharp price swings and speculation while also supporting state revenue. It illustrates how the government could act as a buyer and seller as well as a tax collector.

State industries and workshops

The state did not control all production, but it intervened in industries considered important sources of revenue or materials. Under Emperor Wu, the government took over salt and iron production in 117 BCE. It also established a liquor monopoly in 98 BCE, which was abolished in 81 BCE. The salt and iron policies were contested: supporters argued that state control served public needs and supplied useful materials, while opponents objected to the cost and quality of state-made goods and the effects of official competition on private producers. The salt and iron monopolies were abolished and restored in the Western Han, then again relinquished as central monopolies in the Eastern Han, when production was left to local governments and private operators.

Government workshops made a wide range of goods, including weapons, armor, tools, bronze vessels, mirrors, textiles and luxury objects. Work was organized through different offices and workshops, some run by the central government and others located in regional administrative districts. Production drew on varied labor: state-owned enslaved people, convicts and workers assigned compulsory service, as well as skilled craftspeople who could be paid for their expertise. The workshops served the court and military, but also produced goods for wider use.

Private makers and government workshops could produce similar types of goods. Inscriptions on some surviving objects record details such as the workshop, date or people responsible for production. Such evidence shows that at least some manufacturing was supervised and organized, rather than being an unrecorded process within a household. The broader economy, however, depended on a mixture of household making, estate production, private enterprise and state-directed work.

Markets and internal trade

Farmers and producers sold food, cloth, tools and other goods in local and urban markets. Urban shopkeepers were registered and taxed, while itinerant merchants travelled between cities and regions, often trading on a larger scale. Market officials maintained order, collected commercial taxes, authorized agreements between buyers and sellers and reviewed standard prices. These rules placed commerce within an administrative framework, even as merchants made decisions about what to buy, where to sell and when to travel.

The goods in circulation reflected regional production and demand. Markets handled grain, livestock, fish, salt, liquor, textiles and household wares, as well as raw materials such as timber, bamboo, hides and metals. Iron tools served farming and construction, while bronze, ceramic and lacquer objects met household or luxury needs. A farming family might sell surplus crops or woven goods to obtain coin or items it could not make itself. Merchants and estate managers connected such local exchanges to broader routes between cities.

Seasonal planning mattered to estate trade. The Eastern Han writer Cui Shi’s agricultural advice described times to buy and sell farm products, linking the household’s stores with seasonal changes in supply. An estate could retain goods for use, sell them for cash or acquire supplies when they were available. This made management of reserves and market timing part of agricultural production.

Roads, bridges and canals helped carry goods across the empire. Their maintenance served state communications and troop movement, but also made it easier for merchants to travel and for agricultural products to reach other markets. Trade beyond the empire’s borders added further demand for Han goods. Silk moved along overland routes through Central Asia and was exchanged through diplomatic and commercial contacts; merchants also carried goods by sea. These exchanges formed one part of a wider economy whose foundations remained the labor of farmers and producers within the empire.

Changing pressures in the Eastern Han

Han rulers repeatedly tried to protect small cultivators and restrain wealthy landowners and merchants, in part because independent farming households were central to the tax base. Such efforts had limits. Wang Mang’s Xin regime tried to restrict the buying and selling of land through a plan that placed land under government ownership and assigned shares to cultivators. Complaints from powerful landowners and nobles led to the reform’s repeal within a few years. Currency changes during the Xin also disrupted established practices.

Over the Eastern Han, some peasants lost their land and became dependent on large estates. Natural disasters could intensify this process. After locusts and flooding in 153 CE, the central government’s failure to provide adequate local relief left some displaced farmers seeking support from large landowners. As land and economic influence accumulated locally, the state had greater difficulty collecting taxes and organizing labor. Later in the second century, political and economic crises further weakened central authority. The Han economy therefore remained productive and commercially connected, but the relationship between households, landowners, markets and government became increasingly uneven.

For the wider setting, see Han China: History, Institutions and Society.