Jiaozi Paper Currency: From Sichuan Shops to Song Issue

Published by Anthony
on November 11, 2026

Discover how Sichuan merchants used jiaozi to move value without heavy iron coins, and how the Northern Song turned the bills into a regional currency.

Quick Answer: What Was Jiaozi Paper Currency?

Jiaozi (交子, jiāozǐ) began as paper bills issued by merchants in Sichuan and became an official currency under the Northern Song. It developed in a region that relied on iron coins. In the early eleventh century, the government took over the issue after private issuers had difficulty sustaining the system.^[1][2][3]

Place: Sichuan’s iron currency made large amounts of cash cumbersome to carry.^[1][2]
Private use: Merchant bills could pass between buyers and sellers, with their value depending on the issuer’s credit.^[1][2]
Official issue: The government set up a bureau in 1023 and issued official notes in 1024.^[1][2]

The first merchant bills and the first government notes are different milestones. Earlier documents used for remittance also belong to a different history of paper claims.^[1][2][5]

Sichuan’s paper bills developed around the use of iron cash and later became an official currency.

A buyer with a merchant’s bill could carry the paper across town and hand it to another seller. That convenience mattered in Sichuan. It also made the issuer’s ability to honor the claim important to people who had never deposited the original coins.^[1][2]

Why Iron Coins Mattered in Sichuan

Northern Song Sichuan used iron coins extensively. Payment in bulk required moving and counting a large quantity of metal. The same practical issue is visible in the history of strings of cash. The Chengdu Museum cites an early Song description in which even a payment of a few strings was hard to carry. Paper reduced that burden.^[1][2]

Merchant houses offered a way to leave coins with an issuer and carry a paper claim instead. People could pass bills on in transactions, rather than returning to the original merchant each time. For a bill to work as a means of payment, the next person also had to believe it would be accepted or honored.^[1][2]

How Private Jiaozi Became Government Money

Richard von Glahn describes two problems in sequence. Private issuers became insolvent, and attempts to regulate the existing system failed. The government then took over the issue. The government established the Yizhou Jiaozi Bureau (益州交子務, Yìzhōu Jiāozǐwù) at Chengdu in 1023. The first state issue followed in 1024.^[1][2]

Public issue also gave the notes a role in government transactions. They could be used in collecting revenue, transferring it between places and paying for supplies. As paper gained a larger role in regional payments, iron coins continued to circulate.^[1][3]

What Set the Limits of Official Paper?

An issuing authority could set an amount to be printed and arrange how holders exchanged older issues. The <em>Song History</em> describes the use of a coin reserve. When a series came up for exchange, a holder needed to know which issue the paper belonged to. The reserve supported the process, and the number of notes already outstanding affected how easy it was to replace them.^[3]

The same history describes later expansion of issues to help fund frontier costs, along with declining value. In the early twelfth century, Sichuan’s issuing office was reorganized for qianyin (錢引, qiányǐn). The change in the office and the change in value were distinct. The records describe a successor issue whose value depended on how officials managed it.^[3][4]

Jiaozi, Huizi and Other Paper Claims

The Sichuan program followed earlier uses of paper to transfer or claim money. What made official jiaozi important was that it circulated as a currency under government management. Its market developed around the particular conditions of Sichuan, even when officials tried to extend similar arrangements elsewhere.^[1][3][5]

The Southern Song later issued huizi (會子, huìzǐ) from its capital. That issue had a different date, administrative center and circulation area. The wider history of paper money in Song China follows the coexistence of several issues and the places they served.^[3][4][5]

FAQs About Jiaozi

Was jiaozi the first paper money?

Official jiaozi is one of the earliest documented government-issued paper currencies. Earlier paper claims and merchant bills had already existed. The answer depends on the type of instrument being compared.^[1][2][5]

Did jiaozi completely replace iron coins?

Paper became an important means of payment in Sichuan. Iron coins continued in use in a smaller role.^[1]

Was jiaozi the same as huizi?

Northern Song jiaozi developed in Sichuan. The later Southern Song huizi issue centered on Lin’an. Each had its own administrative history and circulation.^[3][4][5]