From this it clear that well over one century before the opening up of Japanese ports to foreign trade in the mid-nineteenth century, the advantage in the power relationship between China and Japan was already moving to Japan.
Japan Independently Adopts the Gold Standard in the Edo Period
Blessed with plentiful resources, Ch_ing China prided itself on its self-sufficiency, but this was undermined by its dependence on overseas countries for the vital supply of materials for minting money. Japan, on the other hand, achieved self-sufficiency in copper coins that circulated throughout East Asia and in silver that was used in the world market. In this respect, Japan clearly held economic superiority over China.
Japanese silver first entered China at the beginning of the fifteenth century. At that time, Ming China produced around 5,000 to 10,000 kilograms of silver annually, but the supply was running out and silver from Japan and the New World was imported to make up for this deficiency. In the 1570s, the Potosi silver mine in Bolivia embarked upon mass production and was producing more than 250,000 kilograms per year by the end of the sixteenth century. Since this was estimated to account for about 60% of the total amount produced in the world excluding Japan, world silver production must have amounted to around 400,000 kilograms. Meanwhile, Japan had developed large silver mines such as the Omori and Ikuno mines, which yielded as much as 600,000 kilograms a year in their heyday. This figure clearly shows what a huge silver producing country Japan Was. More than 100,000 kilograms of silver was supplied to China from both Japan and the New World in the 1570s, rising to 800,000 kilograms by the 1640S. In China, Japanese silver was melted down into silver coins called _horseshoe silver,_ while New World silver (in the form of silver coins) arriving via the Acapulco _Manila route was used as it was or converted into horseshoe silver coins. The Chinese government did not take any part in the production process, leaving everything to private operators. The situation was very different in Japan, where silver production was controlled by the Tokugawa shogunate at silver mints known as ginza.
In the world market, the countries of Europe used gold while in Asia both China and India used silver. The value of silver measured in terms of gold hardly changed at all during the second half of the seventeenth century to the second half of the nineteenth century, fluctuating only slightly between 14 to 16 units of silver per unit of gold during this period. The demand for silver in India was enormous. In the late nineteenth century Karl Marx wrote, _Indian society is very attached to ornaments made of gold and silver. Even the lowest classes usually possess some kind of gold article such as a pair of gold earrings or a necklace. Gold and silver are widely used even for the rings they wear on their fingers and toes. Women and children often wear thick gold or silver bracelets or anklets, and gold and silver images of deities can be seen in their homes._ In India, silver was used to mint silver rupees, the national currency.
The civilizations of China and India were thus bottomless pits for the consumption of silver. Located in an Asia characterized by this high silver consumption, Edo Japan used silver as well as gold coins and the value of silver in terms of gold remained stable at a ratio of around 11:1 from the seventeenth century to the closing years of the Tokugawa shogunate in the mid-nineteenth century. Japan was broadly divided into two economic regions. East Japan, whose basic currency was gold, and West Japan, which used silver, mirroring the structure of the world economy, where gold was used in the West and silver in the East.
In the So-called Tanuma period (1767_86), during which the official Tanuma Okitsugu exerted his greatest influence on shogunate policy, silver coins known as nanryo nishugin were minted in Japan. Although these coins were made of silver, they were measured in the units of gold money_ry_ bu, and shu (1 ry_= 4 bu; 1 bu = 4 shu)_becoming the first silver coins in Japan to be measured in terms of numerical value.
