Readers may enjoy the excellent travelogue to China that EBI bioinformatician Ewan Birney posted in his blog. Unlike previous trips, this time he had more time to visit many cities, and get a better feel for the culture. In his narrative, he discussed the similarities between China and USA in terms of vastness of the countries, and similarities with Europe regarding diversity of language and culture.
While it’s fun to draw familiar parallels, China is clearly nothing like a mixture of the US and Europe. It is hard enough to completely understand the historical perspectives and cultures of one’s neighbours – it is going to be a long time before I will completely grasp the fundamental complexities of China. What I can say now is that its diversity is more and more fascinating to me, and something to be celebrated.
He also discovered that his name stands for ‘money’ ( 元) in China. There is long history that goes behind it. Chinese discovered paper money long before the West. Song dynasty, which ruled China between 960 and 1279 AD into its golden age, introduced the first paper money. Song period was also saw discovery of gunpowder, compass, printing press and many other fascinating technologies. Technologically, China was centuries ahead of Europe and other regions.
Then came the Mongol invaders from the north, who took over China, established Yuan dynasty and used Chinese technological lead and paper money to establish one of the largest empires in history. In fact, Mongol Yuan empire was surpassed in size only by the British empire. Paper money was one of the key reasons of success of Mongol empire. Mongols provided safety and quickly redeemable currency (because it was paper) over its vast empire and established very efficient trading routes (globalization I). Prior to that, traders had to carry gold and silver, and the method was neither safe, nor efficient. Venice, which was a powerful trading nation at that time, acted as the banker for the Mongols. Marco Polo, a Venetian merchant, visited Asia around the same time.
In fact, upon visiting China from Europe, Marco Polo remarked in his writings with incredulity how ‘[a]ll these pieces of paper are issued with as much solemnity and authority as if they were of pure gold or silver… and indeed everybody takes them readily. . .”
For Marco Polo, this was unheard of. In the Europe of his time, the gold Florin was the major medium of exchange, not paper. And the Florin famously held its metal content at precisely 54 grains of fine gold for nearly three centuries.
Like all paper money regimes, Mongol paper money system blew up spectacularly and resulted in the first global financial collapse and black death. A highly readable narrative can be found here, but we would request you to also check original historical documents. The black death episode could be marked as the end of Mongol empire, and rise of the west.
Centuries later, when Qing dynasty wanted to introduce non-gold money, they brought back the Yuan ( 元) name to possibly suggest that it was banknote money like the same of Mongols, and not gold or silver.
With that historical background, we make different analogies between China and US/Europe than what Birney saw. In our model, Song China is similar to Europe/Britain prior to world war II, which acted as the forefront of modern scientific developments. After WW II, USA took over and utilized the best ideas from Europe to create a vast trading empire. Current era of globalization is not too different from Mongol period, because USA provides safety and security in return for its paper currency to be at the base of all banking systems around the world. How the current era of globalization ends remains to be seen.