Inflation in Eastern China during the Second Sino-Japanese War

Michell Li
Additional contact information
Michell Li: The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise

No 102, Studies in Applied Economics from The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise

Abstract: Although the history of the Japanese invasion of China is well-known and well-taught in China, the history of the currency war between China and Japan during the time is far less known. From 1937-1945, China and Japan engaged in not only a military war but also a "currency war." Japan, in an attempt to generate funds for the war from the war itself and to overthrow the Chinese government, attacked China's currency, the fabi (meaning “legal tender”), by printing counterfeit fabi notes and establishing “puppet” banks in China to issue mass amounts of puppet currencies to displace the fabi. These counterfeit notes and puppet currencies quickly circulated into the economy and led to a period known as the Great Chinese Inflation. Both the Nationalists (the governing party) and the Communists immediately took different actions to control inflation and the influx of counterfeit notes. Inflation was widespread not only in Nationalist- and Communist-controlled areas, but also in Japanese-occupied areas of China.

Keywords: China; hyperinflation; inflation; Second Sino-Japanese War; World War II (search for similar items in EconPapers)
JEL-codes: N15 N25 N45 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2018-05
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://sites.krieger.jhu.edu/iae/files/2020/01/In ... ino-Japanese-War.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:jhisae:0102

Access Statistics for this paper

More papers in Studies in Applied Economics from The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise Contact information at EDIRC.
Bibliographic data for series maintained by Steve H. Hanke ().