Genghis Khan moved his troops into the quasi-Chinese Chin-ruled north China in 1211, and in 1215 they destroyed the capital city. Hisson Ogodei conquered all of North China by 1234 and ruled it from 1229 to 1241. Genghis Khan's grandson, Kublai Khan, defeated the Chinese Southern Song in 1279, and for the first time all of China was under foreign rule.
In 1271 Kublai Khan named his dynasty Yuan which means "origin of the universe." The Yuan dynasty in China lasted from 1279 to 1368. Kublai Khan followed a tentative policy of Sinicization, that is, he adapted to the Chinese way of governing and when you look at his portrait, he looks very much like other Chinese rulers. On the other hand, although he used some Chinese in low positions in the government, he abolished the civil service exams, preferred to use Chinese in his bureaucracy and established separate rules for the Mongols and for the Chinese. His capital, present-day Beijing, became a cosmopolitan and wealthy city.
Kublai Khan made a census of the population, dividing the people intofour categories: Mongols; Miscellaneous aliens (which included West Asian Muslims who performed important services for the Mongols); North Chinese called Han people, those who had been under the Chin state and their descendants, including Chinese, Jurchen, Khitans and Loreans; and finally Southern Chinese, subjects of the Southern Sung, whom the Mongols considered the least trustworthy. The Mongols could not have ruled China without the help of some of the Chinese elite and yet they were reluctant to use the Chinese, particular the Southern Song, in their government. Although Genghis Khan used some Chinese in lower positions in his government, he abolished the civil service exams, kept separate laws for Mongols and for the Chinese, and preferred to employ foreigners rather than Chinese in his bureaucracy as he thought they would be more trustworthy than the Chinese.
Kublai Khan wanted to support agriculture and he created an Office for Stimulation of Agriculture. Although many of his people wanted to establish the herding way of life inside the wall, in 1262 he passed an edict prohibiting the nomads' animals from roaming on farm land. He filled grain storage areas in case of future famines, especially in the north where lands had been damaged by constant fighting. The capital had 58 granaries which stored 145,000 shih (one shih = 133 lbs). Marco Polo said he fed 30,000 poor people every day in the capital. He organized the farmers into groups called she. Each she was composed of 50 families. They were encourage to do self-help projects like planting trees, working on irrigation and flood control, stocking rivers andlakes with fish, and promoting silk production. They were to monitortheir own members and reward those who worked well and punish those whowere lazy. The she also helped the censor watch over the people. It promoted education in better agricultural techniques and basicliteracy.
Kublai Khan organized a fixed, regular tax system. The people did no tpay their taxes to the local collectors but made just one payment to the central government. The government then paid the nobles. He demanded a great deal of corvee, especially to work on the extensions of the Grand Canal, to link the Yangtze River with his capital in order to get enough grain to the capital, on the postal system, and on construction of palaces and temples. He not only demanded people provide labor but also horses and supplies. At the same time he issued edicts demanding overseers not to be oppressive. He did not use corvee to get farmers off their land so it could become grazing land.
Both overland and maritime trade flourished. The Mongols welcomed foreigners who included Russians, Arabs, Jews, Genoese and Venetians. Marco Polo was only one of many traders to receive a warm welcome and to work for the Khan. Mongols themselves were not involved in the caravan trade; they encouraged others. Kublai Khan used caravan merchants to gather intelligence, and he protected and encouraged them. Merchants felt secure and they had relatively high status in Yuan China. Kublai Khan was the first to put in country-wide use of paper currency. Merchants had to convert foreign metals into paper money when they crossed into China. Artisans got grants of food and did not have to do corvee. Marco Polo was very impressed with trade on the Yangtze. The Mongols used the Grand Canal to transport grain to the capital.