Farming, Cities and Money in the Song Economy, 960–1279

From 960 to 1279, the Song economy linked farming households, commercial towns, major cities and long-distance trade across changing political territories. Northern Song rule ended in North China in 1127; the Southern Song court governed from Hangzhou, while the dynasty’s economic connections extended along rivers and canals and through coastal ports. Agriculture supplied food and market goods, while money, transport and state policy helped move resources between regions. These systems varied: southern uplands suited tea better than rice, and the later southern government faced growing pressure on its supply of copper coin.

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Farming, water and rural work

Song governments encouraged the expansion of cultivated land. Under a policy for reclaimed land, a person who brought previously uncultivated ground into production and paid tax could receive permanent possession of it. Irrigation also received state support. In 1069, Wang Anshi promoted measures to extend irrigation, and a reported 10,800 projects had been completed by 1076, serving more than 36 million mu of public and private land. A mu was a unit of area.

Farm work depended on tools and water management as well as land. A strong steel plough designed for reclaiming wasteland was useful in wet areas of the Huai River valley, where it could cut through roots and reeds. Farmers used water wheels to lift river water toward fields, and chain pumps could raise water between irrigation levels. Such equipment extended irrigation by raising water to fields above the supply level.

New crops and practices added to agricultural options. Early-ripening Champa rice was introduced, while Chen Pu’s 1149 agricultural writing recommended adding fresh soil and night soil, or human waste, to maintain fertility. Rural households also combined cultivation with processing and other work. Families with marketable surpluses could sell produce and use the proceeds to buy goods such as oil, charcoal, tea and wine, or invest in additional production.

Regional crops and the land market

Commercial farming reflected differences in climate and terrain. Tea expanded especially in southern China, including upland valleys less suited to rice cultivation. Rural households ran many tea plots, alongside larger private and state-managed plantations. Tea also moved through frontier trade, and the state used its control of the trade in Sichuan tea as a source of revenue and a means of obtaining horses for the army.

Other crops linked farming to processing and urban demand. Mulberry growing supported silk production, while sugarcane, indigo and other cash crops supplied markets for food, dyes and textiles. In the Suzhou area, some families concentrated on mulberry trees and silkworms rather than relying on field crops alone. Cotton cloth also came into wider use by the late Song.

Landholding and production likewise ranged in scale. The evidence describes both wealthy landholders and household producers, including families that sold agricultural surplus and made other goods. It does not reduce rural work to cultivation alone: households might produce wine, charcoal, paper or textiles for sale as well as grow crops. This mix tied village production to markets and gave some rural families a way to earn income beyond what their fields provided.

Markets, cities and commercial revenue

As regional production expanded, roads, canals and rivers connected producers with consumers and commercial centres. Towns and cities brought together traders, food sellers, workshops and customers. In Kaifeng, the Northern Song capital, contemporary descriptions report streets with specialist shops, restaurants, tea and wine sellers, food stalls and entertainment venues. Some food businesses served customers late into the night. The variety of businesses reflects demand from residents as well as officials, merchants and visitors from other regions.

Urban growth did not mean that all goods came from large enterprises. Small family businesses operated alongside major private firms and government-supported industries. Rural producers sold surpluses through markets and intermediaries; merchants and shopkeepers then connected local goods to wider demand. The result was a commercial economy in which regional specialisation mattered: farming, processing, transport and retail could take place in different locations.

The state participated in this economy through taxes, regulation and monopolies. Commercial activity widened the base from which the government could collect revenue, while indirect taxes and state-managed sales helped support its finances, including military costs. Officials disagreed over how much control the government should exercise. Tea, salt and wine were among the commodities subject to monopoly or close state regulation, while other businesses operated privately. The policy mix could change, and restrictions on private production sometimes prompted debate about their effects on local trade.

Coinage, credit and paper money

Copper cash was the principal coin currency, and the number of coins minted rose sharply during the Northern Song. The government produced 800 million coins in 997, according to the figures recorded for that year, and annual output reached six billion by 1085. Cash was useful in markets, but heavy quantities of coins were cumbersome for large transactions and long-distance trade. Merchants could deposit money or goods with wealthy families and wholesalers and receive receipts that could be redeemed elsewhere. These receipts were an important commercial device, but they were not all government-issued currency.

In 1024, the government began issuing official printed paper money in Sichuan. The notes developed from regional arrangements and were initially valid only within designated areas and for limited periods. The state later took a larger role in their production, using printed notes to address demand for a form of payment easier to handle than large amounts of copper cash. Paper money did not immediately replace coins, and the changing rules and geographic limits meant its use differed across the empire.

Sichuan’s paper notes developed in a region using heavy iron coin, making a portable claim especially useful for larger payments. A holder depended on the issuer accepting or redeeming the note under its stated rules. Printing money therefore required more than making sheets: confidence also depended on the quantity issued and the arrangements for using it.

Currency pressures grew as the Song economy expanded. Copper mining declined in the Southern Song, as some accessible deposits became exhausted, while copper coins also left the country through trade. The government used iron coin and paper notes as alternatives. In the late Southern Song, between 1265 and 1274, it introduced a paper currency standard intended for nationwide use. War and financial strain could undermine confidence in notes, however, and the value of Song paper money fell sharply during periods of conflict.

Industry, workshops and production

Song industry ranged from household-scale businesses to large operations with state oversight. Iron production illustrates both the resources and labour involved. Smelting used furnaces and powerful bellows, some driven by water wheels, and consumed large quantities of charcoal. Some northern iron producers used coal-based fuel alongside charcoal, while wooded southern regions continued to supply charcoal for smelting. The change depended on fuel availability and the type of iron being made. In some regions the government regulated smelting, while private works also operated. A report on the Liguo industrial area, for example, described dozens of ironworks run by local families, each employing several hundred workers.

Metal supported farming, transport and everyday manufacture: iron was made into tools, nails and other goods. Ceramic production was another regional industry. Song kilns produced porcelain and celadon, with centres including Jingdezhen and Jizhou. Some wares entered overseas markets, while highly sought-after products also served domestic customers. These industries depended on networks of fuel, materials, skilled work and merchants, but their organisation varied between state-managed production, large private works and small family businesses.

River routes, ports and overseas commerce

Domestic trade relied on waterways as well as land routes. Rivers, lakes and canals connected agricultural regions and cities, while improved canal locks made it easier for larger boats to pass between water levels. Coastal ports linked these inland networks to overseas commerce. Quanzhou, Fuzhou and Guangzhou were among the ports serving trade, and a maritime customs office was established at Quanzhou in 1087.

Merchants invested in seagoing trade, sometimes spreading capital across more than one vessel to reduce the risk of a single voyage. Ports connected Chinese goods and markets with trading networks reaching Southeast Asia and the Indian Ocean. The commerce involved ships, crews, merchants and investors, as well as officials who supervised parts of maritime trade. Overseas exchange added another layer to the domestic market, while the movement of copper currency beyond Song territory contributed to the government’s concern over coin supplies.

For the wider setting, see Song China: History, Economy and Society.