Currency revolution and currency struggle: chartalist thought in modern China (1912–1949)

Chartalism had once been an influential tradition of monetary thought in China. During 1912–1949, two currents of chartalism emerged in China: The thoughts of Sun Yat-sen and his followers on currency revolution and those of the Communist Party of China on currency struggle. Despite its historical significance, chartalism in modern China remains largely absent in English and Chinese literature. This study examines the historical context and theoretical content of chartalism in modern China and compares it with Western chartalism. The theoretical sources of modern Chinese chartalism include ancient Chinese chartalism and Western economics, which were introduced into modern China after 1840. During a historical period characterized by the loss of Chinese sovereignty, frequent wars and backward production, chartalists advocated for the issuance of state money to establish an independent sovereign currency system, address fiscal difficulties and develop the economy. Modern Chinese chartalism resulted from attempts to provide theoretical support for issuing state money. While modern Chinese chartalism has a theoretical core similar to Western chartalism—namely, that money is a creature of the state—it also has distinctive characteristics, most notably its emphasis on commodity reserves as a mechanism for creating demand for state money.