Economic Control of the Soviet Union in Manchuria after World War II: Monetary Policy

Abstract

This article is devoted to the little-known issue of monetary policy of the Soviet authorities in occupied Manchuria after the end of World War II. Comparing Russian and Chinese archival materials, the author studied the process of issuing new banknotes in Manchuria and the main items of expenditure of the Soviet administration. The yuan of the Red Army command was officially authorized to be released in Manchuria from 10 December 1945, following an agreement between the USSR and the Republic of China, but in fact it was put into circulation already from September 24, 1945. New banknotes containing denominations of 1, 5, 10 and 100 yuan were printed based on the decisions of relevant institutions of the USSR, were used by the Soviet side in industrial construction, when buying goods, to pay workers and employees and finance various institutions on the territory of Manchuria. It was considered as reparation, since the USSR agreed with the National Government of the Republic of China that the issued currency would be redeemed at the expense of indemnity from Japan. It was also one of the sources of rising inflation in Manchuria. According to statistics, the amount of banknotes issued by the Red Army command during the period of their stay in Manchuria is 9.725 billion yuan. After the withdrawal of Soviet troops and the transfer of sovereignty over Manchuria to the Republic of China government in early May 1946, in accordance with the agreements, the redemption of the yuan of the Red Army command and its exchange for Chinese currency began. This measure was painful and caused widespread discontent.