Knife money in the context of "Commodity money"

Ancient Chinese coinage includes some of the earliest known coins. These coins, used as early as the Spring and Autumn period (770–476 BCE), took the form of imitations of the cowrie shells that were used in ceremonial exchanges. The same period also saw the introduction of the first metal coins; however, they were not initially round, instead being either knife shaped or spade shaped. Round metal coins with a round, and then later square hole in the center were first introduced around 350 BCE. The beginning of the Qin dynasty (221–206 BCE), the first dynasty to unify China, saw the introduction of a standardised coinage for the whole Empire. Subsequent dynasties produced variations on these round coins throughout the imperial period. At first the distribution of the coinage was limited to use around the capital city district, but by the beginning of the Han dynasty, coins were widely used for such things as paying taxes, salaries and fines.

Ancient Chinese coins are markedly different from their European counterparts. Chinese coins were manufactured by being cast in molds, whereas European coins were typically cut and hammered or, in later times, milled. Chinese coins were usually made from mixtures of metals such copper, tin and lead, from bronze, brass or iron: precious metals like gold and silver were uncommonly used. The ratios and purity of the coin metals varied considerably. Most Chinese coins were produced with a square hole in the middle. This was used to allow collections of coins to be threaded on a square rod so that the rough edges could be filed smooth, and then threaded on strings for ease of handling.

Yan (Chinese: 燕; pinyin: Yān; Old Chinese pronunciation: *ʔˤe[n]) was an ancient Chinese state during the Zhou dynasty. Its capital was Ji (later known as Yanjing and now Beijing). During the Warring States period, the court was also moved to another capital at Xiadu at times.

The history of Yan began in the Western Zhou in the early first millennium BC. After the authority of the Zhou king declined during the Spring and Autumn period in the 8th century BC, Yan survived and became one of the strongest states in China. During the Warring States period from the 5th to 3rd centuries BC, Yan was one of the last states to be conquered by the armies of Qin Shihuang: Yan fell in 222 BC, the year before the declaration of the Qin Empire. Yan experienced a brief period of independence after the collapse of the Qin dynasty in 207 BC, but it was eventually absorbed by the victorious Han.