4 ideas
In early Song Sichuan, which was kept as a separate currency zone using heavy, low-value iron coins, merchant houses in Chengdu issued deposit certificates (jiaozi) so traders need not haul iron cash. Later fiscal pressure pushed the government to over-issue notes and roll series over, eroding their value.
The Ming founder's inconvertible paper currency (baochao) collapsed through over-issue and refusal to redeem, so private markets turned to uncoined silver by weight despite official bans. The state eventually conceded, and the Single Whip reforms commuted land taxes and labor services into silver payments. This domestic demand for silver, not foreign supply alone, drew huge inflows of Japanese and American silver into China in the sixteenth and seventeenth centuries.
The Song dynasty funded a vast standing army and bureaucracy by shifting its revenue base from agrarian levies to monopolies on salt, tea, and liquor plus commercial transit taxes. As a result, the state had a direct stake in expanding markets, money supply, and trade.
Under the Tang equal-field system, the state allotted land to households and taxed adult males per head in grain, cloth, and labor, which assumed the state controlled land distribution. After the An Lushan rebellion broke that control, the Two-Tax reform of 780 taxed households on assessed land and property, reckoned in money and collected twice a year. Reading the change as the state abandoning control of resources in favor of taxing them explains the rise of private landholding and markets that followed.