economy: Asia and the Pacific 321 Control or protection of access to water was an important issue that had social and political consequences In regions where rainfall was plentiful, where there were many water sources useful for irrigation, or where there was no threat from outsiders (such as raids by upland populations and semi-nomads from the grassland steppes), there was little need or opportunity for a political elite to manage or dominate the water system However, where there was a limited water source or a wider need to coordinate water management, political development was likely While some historians emphasize the role of local initiative in the development of wet-rice agriculture, others highlight the critical role of a single powerful individual or external institution—religious or political—as the initiator or consequence of wet-rice cultivation and emphasize the subsequent requirements of surplus productivity to pay the political or managerial elite Historians debate whether terraced agriculture—and irrigated wet-rice agriculture as a whole—required the efforts of a well-organized and hierarchical “hydraulic” society and how this contributed to the development of early centralized political systems In a so-called hydraulic society the great majority of individuals were subordinated politically and ritually to those who built and maintained the terraces, water canals, and storage tanks that comprised the water-management system In such a society the needs of the individual were secondary to the welfare of the group The social system reflected the natural hierarchical structure of terraced farming, with both water and power flowing from top to bottom The Chinese Political Economy China’s economic vitality can be measured by its urbanization By the Song era (960–1279) China had five cities with populations over million; 50 had populations of at least 100,000 The Italian merchant Marco Polo (1254–1324), who visited China at the end of the 13th century, described China’s cities as the greatest in the world, with marketplaces where anything one might desire was available In the minds of China’s Confucian scholars, this prosperity depended on each person’s fulfilling their societal responsibility: Peasants produced grain and cloth; artisans transformed China’s natural resources into finished products; merchants facilitated the circulation of China’s various products; and rulers managed money, which had become the essential basis of commercial exchange The previous dynasty, the Tang (618–907), had abandoned the use of bolts of silk as supplementary currency and introduced copper coinage and a low-denomination unit of exchange By 1085 Song mints were producing billion copper coins per year, which circulated throughout Asia as the regional basis of increasing monetized exchanges that peri- odically created shortages of copper cash in China By the end of the Tang era Chinese merchants traded receipts from deposit shops where they had left money or goods To insure against periodic credit and monetary shortfalls, Song administrators licensed shops to issue these certificates of deposit; these licensures evolved into the world’s first government-issued paper monetary system In the Song era Chinese merchants formed partnerships and joint-stock companies, and they developed management systems that separated owners and managers In large cities merchants and artisans were members of guild organizations according to the types of products they produced and sold The guilds set production standards and prices and arranged sales to wholesalers and shop owners The government negotiated with these guilds in its acquisition of goods or assessment of taxes During the Tang and Song eras the center of China’s economic productivity shifted from northern China to the Yangtze River basin in central China This was due to the greater potential productivity in central and southern China, where warmer temperatures allowed the harvest of two crops per year The south also had more rivers and streams that reduced the cost of transport and allowed the development of regional specialization The Tang initially constructed and the Song extended the Grand Canal that linked the Yangtze and the Yellow River basins, which allowed mass shipments of rice and other goods from south to north In 742 China’s population was roughly 50 million; with expanded rice production in central and southern China and other economic innovations, China’s population reached 100 million by 1102 Farmers responded to the new economic opportunities by increasing their productivity They brought new fields under cultivation, built new water-management systems, and developed innovations such as steel-tipped plows, wheelbarrows, waterwheels, and double-cropping (the planting of two crops in alternate rows or a succession of carefully timed crops) Farmers’ surpluses allowed them to acquire charcoal, tea, oil, wine, and cloth from the marketplace They even began to purchase grain for their daily consumption and to specialize in the cultivation of cash crops, notably sugar, oranges, cotton, silk, and teas Some rural people moved to urban centers, where they became craftsmen, or took jobs in the transportation industry, notably in providing inland and coastal transportation By the Song era China’s shipbuilders were building compartmentalized ships that could carry 500 sailors and extensive cargo on China’s rivers and canals and in the adjacent ocean Among the variety of products Song merchants sold were Chinese silks, porcelain, stoves, plowshares, cooking equipment, iron nails, printed books (from