16th Century China relied on silver coins as a medium of exchange despite a lack of domestic sources of silver. What’s more, given the prevailing technologies of the time China produced a number of goods for which there was European demand, but Europe produced no goods that Chinese households wanted to consume. Consequently, as Charles Mann documents in 1493: Uncovering the New World Columbus Created, China ran a large trade surplus in order to amass foreign exchange:
Today, of course, it’s not silver from the mines of Potosí that China is amassing. Instead it’s debt created by the US Treasury and the government-sponsored mortgage agencies. But the basic structure of exporting real goods in order to amass monetary instruments is quite similar.
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