Salt in Chinese history including salt production and salt taxes played key roles in economic development, and relations between state and society in China. The lure of salt profits led to technological innovation and new ways to organize capital. Debate over government salt policies brought forth conflicting attitudes toward the nature of government, private wealth, the relation between the rich and the poor, while the administration of these salt policies was a practical test of a government's competence.
Because salt is a necessity of life, the salt tax (sometimes called the salt gabelle, after the French term for a salt tax) had a broad base and could be set at a low rate and still be one of the most important sources of government revenue. In early times, governments gathered salt revenues by managing production and sales directly. After innovations in the mid-8th century, imperial bureaucracies reaped these revenues safely and indirectly by selling salt rights to merchants who then sold the salt in retail markets. Private salt trafficking persisted, however, because monopoly salt was more expensive and of lower quality. Local bandits thrived on salt smuggling and rebels supported themselves with it. The basic system of bureaucratic oversight and private management provided state revenue second only to the land tax, and, with considerable regional variation and periodic reworking, it remained in place until the mid-20th century.
