China had a high demand for silver due to its shift from paper money to coins in the early period of the Ming dynasty. The Ming paper currency eventually failed due to self-imposed inflation along with an inability to stop the production of counterfeit bills.
The first global currency
China's acceptance of silver in exchange for commodities such as tea, silks and ceramics would eventually result in the Spanish dollar – silver minted coins – evolving into the world's first common currency.
The Manchu dynasty of China preferred that their subjects pay taxes in silver not gold. This made China the unique situation where silver was more valuable than gold.
Early in the dynasties of Shang (1600 B.C. – 1046 B.C.) and Zhou (1046 B.C. – 771 B.C.), gold was already used in China, and was officially used as currency in Warring States Period (475 B.C. – 221 B.C.).
In China, the demand for silver initially drove the global economy. Then, by 1750, silver glutted the Chinese market, bringing its price down and leading to inflation.
By 1935 China and the rest of the world has abandoned the silver and gold standards, respectively, in favour of currencies pegged to the pound sterling and the U.S. dollar.
In 1581, the Sycee, a silver ingot currency used throughout China's late imperial period, became especially prominent in Ming Dynasty (1368–1644) tax reforms emphasizing payment in silver instead of in-kind taxes such as grain, rice, or labor.
Gold, measured out, became money. Gold's beauty, scarcity, unique density (no other metal outside the platinum group is as heavy), and the ease by which it could be melted, formed, and measured made it a natural trading medium.
China added to its gold reserves for a sixth straight month, extending a flurry of purchases as central banks around the world expand their holdings of bullion amid escalating geopolitical and economic risks.
Most Chinese gold features a 24k stamp of authenticity. The reason why Chinese gold is regarded as one of the most authentic forms of gold has to do with the fact that China is the world's leading producer of gold jewelry, and for centuries, China has always made some of the best and the most impressive gold jewelry.
Silver reserves worldwide 2010-2022
Silver is a soft, white lustrous metal. In 2022, the total global reserves of silver amounted to some 550,000 metric tons.
Estimates report gold is 5-7x more abundant above ground than silver. Beneath the surface, silver is approximately 19x more abundant than gold. To date, over 1.5 million tonnes of silver have been mined.
American investors pour more money into physical silver than anyone else in the world. In fact, American investors hold claims to approximately 100 million ounces of silver, more than the rest of the world combined (excluding India).
China has recently considerably ramped up its gold imports, in an effort to diversify the People's Bank of China's (PBOC) holdings, as well as reduce their reliance on the US dollar (DXY).
The Europeans of course were not shipping the silver to China as an act of donation or charity. They were getting goods in return, such as silk, porcelain, and later especially tea.
Opium and tea
They would only sell their goods in exchange for silver, and as a result large amounts of silver were leaving Britain. In order to stop this, the East India Company and other British merchants began to smuggle Indian opium into China illegally, for which they demanded payment in silver.
What Country Has the Most Gold? The country with the most gold is the United States, with 8,133 metric tons in the American gold reserve. This amounts to a value of $480.84 billion, going by the price of gold at the beginning of January 2023.
China may invade Taiwan, or it may not. Either way, there is financial uncertainty. Precious metals are the counterbalance to that uncertainty. Russia, China, Brazil, Egypt, India, Turkey, Qatar, and many other countries are stockpiling gold to overthrow the Dollar and ensure sovereignty.
China Keeps Stockpiling Gold, Adds 18 Tons in March to Reach 2,068 Tons in National Reserve.
About 244,000 metric tons of gold has been discovered to date (187,000 metric tons historically produced plus current underground reserves of 57,000 metric tons). Most of that gold has come from just three countries: China, Australia, and South Africa.
Discovery of gold in Australia
There had been multiple gold finds in New South Wales (Bathurst and Monaro), Tasmania and what would become Victoria prior to the 'official' discovery of the precious metal by Edward Hargraves near Orange in 1851.
All of the gold that's deposited in our planet was formed during the explosions of stars and collisions of asteroids, and eventually found its way to earth over time. Today, gold is one of the most valuable precious metals and rarest natural minerals.
Problems with counterfeiting and over-issuance of the notes convinced the Ming dynasty to discontinue the use of paper money by 1455, with disastrous results for Chinese trade.
Taels varied considerably in weight over China, depending on the scales used in a particular region or locality. The most important currency tael was the Shanghai tael, whose fine-silver equivalent was 518 grains.
Japan, which produced huge amounts of precious metals from the late 16th century, exported silver to China in order to purchase Chinese raw silk and silk fabrics. In fact, however, an alternative route for the export of Japanese silver remained open for 60 more years, and silver kept flowing to China through it.