Concurrent but non-integrable currency circuits: complementary relationships among monies in modern China and other regions

Abstract

The coexistence of a number of monies with fluctuating exchange rates in modern China and other Asian regions appeared chaotic to foreign observers. However, behind this apparently confused situation lay a multiplicity of currency circuits, each of which consisted of pairing a trade zone with a particular currency. Their concurrence resulted from the difference of temporality and space in monetary usage. The difficulty of matching heterogeneous demands for money to uneven supplies of currencies made for multiple currency circulation. Such a multiplicity caused some merchants to make use of imaginary units which were alive only in account books. Though complementary relationships between incompatible monies prevailed in China, India and other regions, a combination of a remittance system and local credit supply in some societies happened to synchronise currency streams to make a compatible monetary system. This comparative study suggests that currency streams often had to pass through multiple market layers, and that some friction in the streams meant that the market required plural monies.