China's 1935 Currency Reform: A Nascent Success Cut Short
By Noah Elbot
This paper argues that the Nationalist Government had little alternative to the radical 1935 Chinese Currency Reform in view of its lack of coherent financial system during first part of the 20th century. The success of the project can be found in the economic data from 1936, and from the effective institutions which started to develop from the reform. This growth, however, was cut short by the military spending sequestered to fight off the Japanese invasion in 1937. The currency, still weak from factors such as international politics and a poorly organized banking system, failed to absorb this expansion and fell into a state of hyperinflation. Without a credible currency, the post-war recovery by the Guomindang (GMD) was impotent, and actually helped to lay the groundwork for the Communist rise to power. This paper shows that although the currency reform was executed successfully, the economy was not able to stabilize before the disruption and destruction of the Japanese invasion, and that the resulting hyperinflation helped precipitate the demise of the Nationalist government on the mainland.
The success or failure of the Nationalist experiment during the short-lived Chinese Republic remains a contentious topic among historians. Economically, the newly reunited nation was still suffering from the Warlord Period, the first Sino-Japanese War, and a multitude of internal rifts. The Nationalist government, headed by Chiang Kai-shek, took a range of measures in an attempt to stabilize the country. Central to this period is the 1935 currency reform, which removed China from the silver standard and pegged it to a mix of foreign currencies. This paper argues that the currency reform was a necessary move, allowing China a coherent financial system that had great potential for growth. The Japanese invasion in 1937, however, was systemically destructive, disrupting the fundamental market structure and throwing the financial institutions into disarray. This paper argues that, although the 1935 currency reform had potential for development and economic stability, the underlying institutions were fundamentally shaken by the Japanese invasion and unable to weather the subsequent reconstruction. The resulting hyperinflation factored strongly into the defeat of the Nationalist government on the mainland during the Chinese Civil War.
China at the Beginning of the Republican Period
In 1928, when the Guomindang (GMD) began its rule from Nanjing, China could hardly be called unified. The Warlord Period had left much of the country's organizational infrastructure and markets in tatters, and foreign investment was negligible. During the Warlord Period and even before, each territory had developed its own local currency, ranging from paper to silver or copper. Exchange rates were mostly based on local custom, or approximation to the tael system, which was roughly 40 grams of silver. Dr. Wen Pei Wei, in his influential 1914 work The Currency Problem in China, states that “of a currency system it can be seen that China currently has none... No one single unit of currency in the Chinese system, if it can be called that, serves the function [of standard of value] for the country as a whole.” Though many historians refer to this period's currency as conforming to a silver standard, this is misleading because there was no coherent system of convertibility among the currencies. Currencies were subjectively pegged based on quality, weight, and other criteria. Growth rates were low during the era in spite of steps taken by the Nationalists to increase foreign trade and rapidly build infrastructure, such as railways. In addition to hindering enterprise, it was almost impossible to effectively tax the diverse range of currencies. The Nationalist government struggled to provide small fixes and unified exchange systems; however, it became obvious that a large-scale reform was needed in order to modernize the financial system.
The problems caused by the chaotic system came to a head in 1934. China had been shielded from the original market crash in 1929; however during the 1930s, the Great Depression caused a precipitous drop in foreign trade and investment as countries turned to isolationist, protectionist policies. Post-imperialist China was increasingly dependent on foreign investment for both imports and exports, and the lowered purchasing power of trading nations was devastating to local economies. By some estimates, foreign investment made up 20% of overall investment in China during that period. The primary cause of the collapse, however, was not a drop in consumption but rather the rise in silver prices in rest of the world. As the value of the gold standard currencies of the world powers dropped with the global market crash, the price of silver rose significantly, lessening China’s trade advantage. The rising silver price also set off an even more insidious trend: the steady flow of silver out of China. Because silver was not an official currency of China, the metal itself was subject to the global market price set in the London trade houses and therefore went to the highest bidder. This caused silver to flow from rural areas into urban areas— pooling primarily in Shanghai’s international exchange markets—before jumping offshore. By 1934, more than half of the specie that remained in the country was in Shanghai. As silver left China, prices varied wildly and a fall in agricultural output and other sectors of the economy followed.
The crisis was further augmented by the policy decisions of the United States. By 1934, President Franklin Roosevelt had practically removed the US from the gold standard in response to the Great Depression. This move, however, was balanced by increasing dependence on silver and minting silver dollars. The United States’ new appetite for silver birthed to the Silver Purchase Act of 1934, causing global silver prices to skyrocket with the new demand. The precious metal was rapidly exported from Asia, causing nominal prices to fall, real prices to inflate, and subsequently the cost of living rapidly became out of reach for most of the population as the supply of currency dwindled. As silver prices fluctuated, banks began to rely on the values of commodities, especially real estate, to finance loans both in Shanghai and the rural markets. Compounding the issue, the Japanese government released the Amou Doctrine in 1934, stating that Japan would oppose any foreign assistance to China. Laying claim to the China as a Japanese suzerainty, this Asian Monroe Doctrine left the Nationalist government without a clear chance of receiving foreign assistance. In June 1935, the shock was too much for the Chinese markets to handle, and the real estate market subsequently collapsed.
The 1935 Currency Reform
In view of the market instability, it became clear that silver could no longer be relied upon as a stable value holder for the Nationalist Government. In order to ensure the economic well being of the country, the decision was made to find a new currency peg. The 1935 Currency Reform remains controversial as to how efficacious it was in stabilizing domestic markets. The next section will give a brief outline of the proceedings surrounding the reform and the nature of the changes themselves, before discussing perspectives on the success of the project.
Due to the Amou Doctrine, Great Britain and the US were wary of the political consequences of defying the Japanese and providing overt assistance to the Nationalist government. England still held a policy of appeasement during the period, and US diplomacy was locked in debate over isolationism. In addition, suspicion that the Nationalist government was planning a systematic currency reform would have sent the markets spinning even further out of control. Due to these considerations, Kong Xiangxi, China's finance minister, had to conduct planning meetings in secret. Kong ended up using the US's thirst for silver to China's advantage, trading for about $100 million USD, which was used as a stable reserve base to launch reform. From November 1935 to December 1936, banks issued new paper currency, which was completely detached from the silver standard. Chinese were required by mandate to hand in their current silver reserves in return for the new currency, mostly in order to supply the silver promised to the United States. The Government and the newly formed central bank were careful to do a controlled release of about Ch$2 billion* worth of the new notes in order to prevent inflation, and precautions were taken to distribute notes gradually and fairly. In the few months following the release of the notes, the government waited to see whether the Chinese would trust the new, unified currency.
The stabilizing core of the new currency was its peg to combined exchange rates of Great Britain, the United States, and Japan. In order to promote confidence, the currency, called the fabi, was fully exchangeable into any of these global currencies, addressing the primary issue with the old silver coinage. Kong and the central bank decided to keep secret exactly how the fabi was valued between the three currencies. This was both the biggest strength and weakness of the fabi. The decision to peg the new currency to all three currencies was a clever diplomatic maneuver: Chinese took no sides in the growing tension among the world powers, no nation held complete control over the value of China's currency, and in the competition to become the world's reserve currency, each of the pegged countries began courting China to link solely to their money. The valuation was used as a bargaining chip to try to secure both loans from the British and more advantageous silver trade terms with the Americans. In addition, the fully convertible currency allowed for easier global trade, and greater government control over import-export imbalances. As the new currency began to diffuse throughout the market, it seemed that domestic confidence began to grow.
One argument against the currency reform was that the convertibility made the new currency inherently inflationary, and was therefore not sufficiently stable to encourage private enterprise and investment. Carl Riskin of Columbia University argues that Chinese industry had a considerable surplus during the 1930s, which was subsequently mismanaged by a culture naïve about private investment. He notes that often, workers would donate their salaries to political groups or government projects instead of investing it themselves in private enterprise. Riskin claims this cultural peculiarity was encouraged by the government, and remained during Communist rule up until the reform period almost 50 years later. Other historians, such as Robert Dernberger of Stanford University, take the position that the Nationalist government had a more direct role to play in the inflationary effects. Dernberger posits that the Nationalists left the silver standard in order to use the currency as their own personal bankroll, printing money to offset deficits. According to Dernberger, this inflationary spiral prevented the Nationalists from competing with Japanese growth.
A third position, taken by Phillip Richardson of the University of Bristol, is that the Nationalist government had, in fact, followed the Japanese model too closely. By removing the silver peg, Richardson argues that the centralization of power gave the Nationalists the ability to run state supported enterprises similar to in Japan. This system led to a vindictive form of bureaucratic capitalism, whereby government officials were spending public money for private gain. He also notes the disproportionate amount of government spending focused on the GMD military, Chiang Kai-shek's personal project. The distrust of private enterprise led to low private investment, preventing the government from meeting its full potential. However, in contrast with other historians, Richardson does admit that much of the economic hardship of the Republic was situational rather than due to mismanagement. He discusses efforts by the GMD to promote import substitution strategies, which were fatally limited by China's relatively small market share in global markets and price-taker status. According to Richardson, most of the obstacles the GMD encountered were endemic to the state of post-imperial China, rather than the fault of the Nationalists.
Critically, some of these economic assessments are founded upon a flawed direct comparison between China and the growth of Japan in the early 20th century. Dernberger fails to take into account institutional, societal, and geographical differences between the two nations, as well as the varied impact of the Great Depression. Some accounts also overly emphasize the success of the Communists post-1949 as a position by which to criticize the growth of the Republic in the 1930s. Not only do these figures seem inflated in comparison (and are possibly even incorrect), but they fail to take into account the effects of the Great Depression and the tense state of the world on the brink of World War II.
The primary argument against a negative assessment of the 1935 currency reform is the data from 1936 up until the beginning of the Japanese invasion. Bond prices began to rise through the middle of 1936 and into 1937, giving the government more capital to finance debt incurred from the recovery process. These measures were paired with limitations on fiscal spending in a concerted effort to balance the budget. Consequently, Prices “re-inflated” to the level they were at before the run on silver, though this rehabilitation was slow to filter down into the rural retail market. The economy quickly regained traction in international markets as well, as foreign investment rose and the trade imbalance began to right itself. Within the year, the Republic's credit rating reached new levels, garnering international loans from the US and Great Britain for infrastructure improvements. In March 1937, the Governor of the Central Bank of China, T.V. Song (also Chiang Kai-shek's brother-in-law) annouced, “There is no gainsaying the fact that during the past eighteen months the whole outlook in the country, politically, financially and commercially, has changed completely and for the better.” In the period of less than two years, there was an economic optimism in China that had little precedent in modern times.
The essential strength of the fabi was its easy convertability to foreign currencies, especially those of the three pegged world powers. Although this policy instilled confidence in a populace that had never known a floating paper currency, it also severely limited the actions of the Nationalists. The government could not simply print money to finance its debt lest it face high inflation due to the so-called impossible trinity of monetary policy. The very stability of the system relied on the government's frugality. This runs contrary to Richardson's argument that state enterprises were too powerful. In fact, they made up for less than 10% of productive capital in 1936. The rest was domestic industry and, to an even larger degree, foreign investment.
There were remained key flaws in the Chinese system. The rural banks still relied mostly on collateral loans, and credit was not forthcoming outside of the major cities. The Nationalists were unable to finance many of the infrastructure projects needed to truly industrialize the country and were spending too much money on military development. However, these remaining problems were small compared to the progress gained within just 18 months. The stability of the new currency, combined with an especially successful harvest, seemed to signal a new, optimistic era for the Chinese Republic.
War with Japan
The only nation that stood to lose from China's rise was Japan. Removal from the silver standard brought down the prices of Chinese exports, which now competed for market share in South East Asia. A fiercely nationalistic Japan was also incensed by US and Great Britain's defiance of the Amou Doctrine by funding loans into China in support of the Nationalist government. Economically, Japan took a heavy-handed approach extracting raw materials and resources from China. The Japanese military also expanded its presence in Manchuria, a contested northern region of China. Aside from the economic competition, there was also a powerful element of racial and cultural animosity. Hopes for a peaceful Asian conclusion quickly faded as both nations prepared for war. On July 7, 1937, the so-called Marco Polo Bridge incident sparked a full-out invasion by Japan.
The progress of the war moved quite swiftly, and by 1938, the country was fragmented into many smaller regions controlled by the Japanese, GMD, or CCP forces to one degree or another. The GMD was pushed out of Nanjing and the entire Yangzi river delta, retreating back to the traditional southern stronghold of Chongqing. The war brought with it many atrocities by the invading forces, the most conspicuous of which being the Rape of Nanjing. The highly developed eastern region of China was under Japanese occupation until the end of the war in 1945 and suffered immensely during this period.
The fabi, at least at the beginning of the war, actually faired quite well. The Japanese attempted to attack the currency directly by installing their own reserve bank in the occupied region of China. They released a new currency and issued edicts stating that use of the Republic's currency would be severely punished. In spite of this, the fabi was actually still the most secure mode of exchange, as the new Japanese currency was overprinted and prices inflated. Japanese policy was, however, successful at replacing Chinese enterprises with industries imported from Japan, from transportation to utilities. As the war continued, so did the disruption to economic activities. The Yangzi closed in 1937, effectively halting internal trade, and as Japan took control of most major ports, the GMD were increasingly sequestered to central China. Between land and infrastructure destroyed in battles, economic assaults on both enterprise and currency, and the retreat from Nanjing, almost all of the foundation of the Republic's economy had been destroyed.
In 1939, World War II broke out in Europe. Initially, the effects of World War II were little felt by Republican China; however international aid quickly dried up, as US and British supply lines were unable to reach the GMD, which was now mostly landlocked in central China. In 1941, with the Japanese bombing of Pearl Harbor, the Pacific was no longer a travel route for foreign ships, halting aid and international trade.
As the war wore on, the fabi finally succumbed to an inevitable end. High war spending, insufficient access to foreign support, and lack of commercial activity all led to hyperinflation. Chiang Kai-shek needed to print money in order to maintain the military forces necessary to repel the Japanese forces. From their new capital in Chongqing, the Nationalists could not avoid printing excessive amounts of currency. Additionally, international aid was tepid and reserves fast drying out. Between 1938 and 1941, The US continued to buy Chinese silver in exchange for $25 to $50 million dollar loans, which could only be used for non-military spending. Unfortunately, the support was too little. The resulting inflation from excessive money printing rendered the fabi worthless.
At this point, it is worth observing the dramatic shift in stability of the fabi from the confidence of 1936-'37 to the hyperinflation of the Sino-Japanese War. Many of the characteristics of the 1935 Reform that initially seemed successful became destabilizing.
Primarily, the strength of the Republican currency became its central fault: in times when high spending was necessary, the pegged currency necessarily devalued itself. During times of peace, such as 1965, this tradeoff served to moderate government spending and power, effectively exchanging flexibility for market confidence. This self-regulating process created a high potential for internal growth but, more importantly, elicited confidence from international sources who trusted that a currency pegged to their own would be unlikely to fail. However, this was a fragile balance even during times of peace. In late 1935, the government issued high interest bonds in order to pay back debts. This caused an uproar within the Shanghai business community, as their nascent enterprises were starved for investment as capital flowed towards bonds. The Japanese invasion necessitated a much more aggressive Chinese fundraising strategy than one wholly just from bonds. As the GMD needed the flexibility to finance military expansion, greater amounts of money were printed. With a lack of moderation in supply, the currency was no longer viable to be exchanged for foreign currency at the rates dictated by the government.
Subsequently, the convertibility of the fabi also became a fatal flaw. Consumers had been convinced to adopt the new bills due to their ability to exchange into a more stable international currency. The fabi relied on a self-sustaining relationship between confidence and growth. As long as growth prospects were high, then people would choose to hold fabi as opposed to foreign currency. This cycle raised the viability and value of the Republican currency and allowed for further growth, when confidence was high. This cycle could be observed during the 1936 economic build-up. In contrast, as growth prospects declined during the war, consumers, especially international businesses, were able to quickly convert their currency and leave the high-risk Chinese market. Even more directly, Japan was able to convert industries over to their own control more easily due to the exchangeability of the fabi. Additionally, as the GMD became isolated in Chongqing and foreign trade shut down, the ability to exchange money into foreign currency became much less advantageous.
Kong's diplomatic maneuvering to prevent pledging monetary allegiance to only one foreign currency also proved destructive during the war. Of the three currencies used as markers, two were at war with the other one. Even more importantly, having a stronger economic and diplomatic alliance with either the US or England over Japan might have been a boon during the early days of the invasion. For example, if China had supported the United States dollar as the reserve currency, President Roosevelt's government might have been more generous with war supplies and financial aid. During the post-reform boom, the expansion of foreign banks into China was welcomed as a sign of increasing prosperity. Chinese merchants also developed a dependency on these banks, however, and when they left the country they took at least Ch$2.5 billion dollars with them. The foreign banks likely contained more capital than the four major domestic banks combined. If the war had not occurred, China's politically neutral decision could have enabled them to benefit from all the major world powers. With the war, however, the policy left the GMD diplomatically isolated, and furthermore resulted in a mass exodus of foreign currencies and investment from China.
As can be seen above, many of the initial advantages of the 1935 currency reforms became detrimental to the Republic's economic stability. An expensive war to fend off a dominant invading army would be difficult for any currency to absorb. The fabi had only 18 months before the Japanese invasion to build up confidence. The fact that the fabi fared as well as it did during the Japanese invasion and that it was still used as a market currency for the entire war speaks to its strength. Its degeneration into hyperinflation was unavoidable considering the stress upon it and the limitations of a pegged currency.
Aftermath and the Decline of the GMD
The end of the Sino-Japanese War was a result of the combination of an over-extension of the Japanese supply lines and the US victory on the Pacific front. The Communist forces had gained significant position during the war, in contrast to the dramatic losses suffered both politically and economically by the GMD. As a result, Chiang Kai-shek and the Chinese Republic were remanded to the diplomatic children's table, barred from participating in the Yalta conference with the other Allied leaders. If they wanted to be considered a legitimate nation, the GMD would have had to sort out its own domestic affairs first—a daunting task. As stated by General Wedemeyer of the US armed forces in Asia, “if peace comes suddenly, it is reasonable to expect widespread confusion and disorder. The Chinese have no plans for rehabilitation.”
Adding to their troubles, China soon became the stage for a proxy war of small-scale sabotage between the US and Soviet forces. Ostensibly working together, the two powers severely botched the Japanese surrender. The Soviet's, sweeping into Manchuria to offer “assistance” just a week before the war ended, began to pilfer machinery and equipment out of Chinese factories, shipping them back to Russia. They also purposefully allowed many of the recovered Japanese weapons to fall into communist hands. The United States forces also mishandled many aspects of the surrender, guiding the Chinese to prioritize military formalities above governance. US diplomats pushed a resistant Chiang Kai-shek to form a coalition government with the Communists. Some American diplomats and military personnel saw this as the only hope of avoiding civil war, though the policy was highly controversial. Now in a much stronger position, the CCP paid lip service to the offers, but in reality were little interested in a power-share.
China was once again in a state similar to 1928: divided, conflicted, and destitute. Each separate area held different allegiances, with the Nationalists losing ground to the Communists' recruitment efforts. For the Nationalist fabi, this meant that exchange prices varied wildly from city to city, sometimes by more than 500%. This led to rampant speculation, exacerbating the discrepancies. Additionally, famine was rampant in many areas that had fallen victim to both the Japanese and GMD scorched earth tactics. In an attempt to stem the suffering and rebuild support amongst the rural peasantry, the GMD printed more money for relief efforts. In 1937, before the beginning of the war, the fabi was worth $.30 cents to the dollar;by 1942, it had dropped to $.03. The hyperinflation can also be observed in wholesale price indexes from the era. Taking September 1945 as a baseline, prices in Shanghai had increased eleven-fold by the following May, and then thirtyfold by February 1947.
Manchuria, having been under Nationalist supervision after fourteen years of occupied rule, was a chaotic mess. Many of the residents, having adapted to Japanese rule, resented returning to the control of the Han Chinese. In addition, both the Japanese and the Russians had looted much of the area during their withdrawal. In order to bypass the inflation of the fabi, the Nationalists attempted to institute a unique currency to Manchuria. This currency, however, also soon degenerated into a state of hyperinflation.
Little financial assistance arrived from abroad. In the aftermath of World War II most countries were focused on domestic recovery, and international trade slowed to a trickle. The markets for Chinese luxury items such as silk were especially hard hit by this trend. Direct foreign investment in China was also not forthcoming, mostly due instability caused by the growing tension between the GMD and the CCP. During the period directly following the war, many businesses had shut their doors due to the confusion of the transfer of power from Japan back to the GMD. What should have been a simple process turned into chaos as vengeful GMD bureaucrats tried to freeze Japanese assets, often hurting Chinese enterprises. The lack of stability was exacerbated with abuses by state police forces, which commandeered cars and looting property all in the name of martial law.
The GMD began to take desperation measures to control inflation and the rise in living costs. They attempted to peg wages to price indexes, which increased the burden on businesses. When that didn't work, the government instituted price and wage ceilings. This effort also failed, as markets revolted against the constraints. The Bank of China also attempted to curb the rapid inflation, but to no avail. To make matters worse, government debt, primarily on military expenditures from the war, was at 66% of total spending. Chiang Kai-shek's government was on the verge of collapse.
On August 19, 1948, the government made one final effort. As a desperate measure, The GMD attempted to reform the entire system by releasing gold-backed currency. The reform led to chaos as people rioted in an attempt to get the mere 2 billion gold fabi notes released. Draconian police measures were instituted, especially in Shanghai, to make sure that only the new currency could be used. However, the efforts were not enough, and as the black market rapidly grew. The new currency, despite its gold guarantee, also became uselessly hyper-inflated. China had devolved into a barter economy, and the Nationalist government was rendered economically impotent until its overthrow at the hands of the Communists.
The rapid death spiral the Nationalist government underwent seemed inevitable in view of the destruction the Sino Japanese War. Economically, it was unfeasible that the juvenile fabi could survive the stresses of post-war China without reform. These difficulties were, however, exacerbated by a flawed transfer of power from the occupying Japanese back to the GMD. During this period, businesses closed down, capital was being looted by both the government and criminals, and confidence was at an all time low. Workers suffered the most from the price and wage instability, causing over 1,500 strikes in 1946 alone. Its power base in the urban centers now gone, the Nationalist government went from the promise of prosperity in 1936 to profound destitution just a decade later.
Initially, the 1935 Currency Reform by the Nationalist government was a success. The Nationalist government released a new currency, based upon efficient convertibility into a range of foreign tender. The economic successes witnessed in 1936 hinted at the potential of the pegged system. Unfortunately, this nascent growth was cut short by the Japanese invasion in 1937. During the ensuing period of inflationary spending, those very strengths of the post-1935 currency devolved into weaknesses, and furthermore, were met with ambivalence and indecision by the international community. Though remaining strong in the initial stages of the war, the currency began a fatal spiral into hyperinflation. In the post-war period, mistakes by the GMD hastened the decline of the fabi, as chaos and corruption caused by the rebuilding effort brought the economy to its knees.
Looking forward, it could be argued that the failure of the currency and the subsequent radical measures to try and revive it even directly assisted the rise of the Communist party. The hyperinflation hit urban workers the hardest, elevating the appeal of the Communist movement for labor unions. Furthermore, the Communist government's own currency, the Renminbi, seems at least partly inspired by the fabi: Today’s Renminbi is pegged to a secret basket of foreign currencies, mirroring the fabi system. The relationship between the fabi and the Renminbi deserves further study. At the very least, the CCP benefitted, by learning from the flaws of the GMD's currency policy. The Currency Reform of 1935 could not prevent the the chaos of the following decade, yet still played a critical role in shaping the development of modern China.
 Yuru, Wang. “Economic Development in China (1920-1936).” The Chinese Economy in the Early Twentieth Century. Ed. Tim Wright. New York: St. Martin's Press, 1992. p.74.
 Very roughly. In practice, the tael measurement differed from city to city even from product to product; the measurement of payment would be different. See “The Currency Problem in China” by Wen Pin Wei
 Wen Pin Wei. “The Currency Problem in China” Columbia Studies in the Social Sciences. Ed. Yalman, Ahmet. New York: Columbia University Press, 1914. p. 311
 Yuru, Wang. “Economic Development in China (1920-1936).” p 66
 Shiroyama, Tomoko. China During the Great Depression: Market, State and the World Economy 1929-1937. Cambridge: Harvard University Asia Center, 2008. p. 10
 Ibid. p. 92
 Dernberger, Robert. “The role of the Foreigner in China's Economic Development.” China's Modern Economy in Historical Perspective. Ed. Perkins, Dwight. Stanford: Stanford University Press, 1975. p 30
 Shiroyama. China During the Great Depression. p. 6
 Shiroyama. China During the Great Depression. p. 35
 Ibid. p. 103
 Ci Hongfei. “On the Consequences of the 1935 Currency Reform.” The Chinese Economy in the Early Twentieth Century. Ed. Tim Wright. New York: St. Martin's Press, 1992. p.194.
 Shiroyama. China During the Great Depression. p. 155
 Ibid. p. 170
 Shiroyama. China During the Great Depression. p. 166
 Ibid. p. 192
 Ci Hongfei. “On the Consequences of the 1935 Currency Reform.” p.199
*Note: Ci Hongei defines Ch$ as the fabi in 1935. See “On the Consequences of the 1935 Currency Reform.” p. 206 for more information
 Shiroyama. China During the Great Depression. p. 188-190
 Ibid. p. 188-190
 Riskin, Carl. “Surplus and Stagnation in Modern China.” China's Modern Economy in Historical Perspective. Ed. Perkins, Dwight. Stanford: Stanford University Press, 1975. p 51
 Dernberger, Robert. “The role of the Foreigner in China's Economic Development.” p. 47
 Richardson, Phillip. Economic Change in China, c. 1800-1950. Cambridge, UK: Cambridge University Press, 1999. p 97
 Ibid. p 96-98
 Riskin. “Surplus and Stagnation in Modern China.” p 49
 Ci Hongfei. “On the Consequences of the 1935 Currency Reform.” p.75
 Shiroyama. China During the Great Depression. p. 195
 Ibid. p. 196
 Ibid. p. 197
 Ibid. p. 199
 Ci Hongfei. “On the Consequences of the 1935 Currency Reform.” p. 202
 Shiroyama. China During the Great Depression. p. 198
 Ibid. p. 196
 Ci Hongfei. “On the Consequences of the 1935 Currency Reform.” p. 202
 Spence, Jonathan. The Search for Modern China. New York: W.W. Norton & Company, 1990. p. 444
 Ibid. p 445
 Ibid. p. 451
 Spence, Jonathan. The Search for Modern China. p. 453
 Spence, Jonathan. The Search for Modern China. p. 453
 Lary, Diana. China's Republic. Cambridge, UK: Cambridge University Press, 2007. p. 136
 Spence, Jonathan. The Search for Modern China. p. 466
 Shiroyama. China During the Great Depression. p. 237
 Shiroyama. China During the Great Depression. p. 209
 Ci Hongfei. “On the Consequences of the 1935 Currency Reform.” p. 203
 Spence, Jonathan. The Search for Modern China. p. 483
 Spence, Jonathan. The Search for Modern China. p. 478
 Ibid. p. 484
 Lary, Diana. China's Republic. p. 160
The Russians did not realize, however, that the instruction manuals and controls would be in Japanese, rendering most of the stolen equipment useless.
 Spence, Jonathan. The Search for Modern China. p. 486
 Ibid p. 486
 Lary, Diana. China's Republic. p. 137
 Spence, Jonathan. The Search for Modern China. p. 467
 Ibid p. 498
 Ibid. p. 495
 Lary, Diana. China's Republic. p. 159-160
 Yuru, Wang. “Economic Development in China (1920-1936).” p. 74
 Spence, Jonathan. The Search for Modern China. p. 486
 Ibid. p. 500
 Ibid. p. 502
 Spence, Jonathan. The Search for Modern China. p. 503
 Ibid. p. 499
About the Author
Noah Elbot was raised in Beverly, MA before joining Brown where he studied Economics and East Asian Studies. Noah has worked in a diverse set of fields, from serving as a legislative intern on international policy and speech writing for then-Senator John Kerry to working on public partnerships with the Providence Public School system. Noah received a scholarship after freshman year from Brown’s East Asian Studies department to work as an ecological field assistant at a research base in the jungles of southern Yunnan Province and later attended LSE’s Entrepreneurship Summer School in Beijing. In the fall of 2012, Noah studied at the Chinese University of Hong Kong and is preparing to return for a master’s program as part of the Brown Plus One partnership. In Providence, Noah is also a leader with the Brown Meditation Community, climbs and whitewater kayaks, and is a proud uncle to his 3 year-old nephew, Oliver.