China inside out: Explaining silver flows in the triangular trade, c. 1820s‒70s

This paper analyses a new large dataset of silver prices, as well as silver and merchandise trade flows in and out of China in the crucial decades of the mid-nineteenth century when the Empire was opened to world trade. Silver flows were associated with the interaction between heterogeneous monetary preferences and availability of specific coins. Before the 1850s, money markets became increasingly efficient, as reliance on bills of exchange allowed exports to grow in times when sound money was in short supply. When a new standard for silver eventually emerged, there was a new peak in China’s silver imports.