The eleventh century was a period of intense political conflict and two major reform movements as well as war with the Tangut Xi Xia. Supported by the emperor, Wang Anshi’s mid-eleventh-century program of reforms proposed to increase dramatically the power of the state to intervene in the economy and in society as a whole. Although these reforms were rescinded, and pro- and anti-reform factions took turns in power, Wang’s reform set in motion political debates that would rage for centuries after. A major reorganization of the government designed to rationalize the functions of an increasingly complex bureaucracy took place in the late eleventh century. Encounters with rising steppe empires circumscribed political debates at court throughout the Northern Song. The Khitan Liao Empire was destroyed by one of its own vassal peoples, the Jurchen, who then created their own empire and occupied the northern territory of the Song. This marked the fall of the Northern Song, with its capital at Kaifeng in the north, and the founding of the Southern Song, with the emperor’s “temporary residence” in the Yangzi delta city of Hangzhou. The Jurchen Jin was in turn defeated by the rising Mongols, who then conquered the Southern Song.

The long transition – often marred by violence – between Tang and Song discerned by Naitō Konan marked the advent of a new world. The An Lushan Rebellion (755–763) triggered profound political and military crises that shattered the institutions of the Tang dynasty, but also set in motion the slow progression of the market economy, which the Tang leadership began to see as the necessary means to restore its fiscal authority. With the collapse of the equal-field system of state land allocations in the wake of the rebellion, the Tang abandoned the principle of uniform, in-kind taxation of farming households as the basis of its fiscal and military systems. Urgent necessity prompted the adoption of new and more flexible fiscal strategies to secure revenues from commerce and consumption. The expansion of the market economy mitigated the Confucian elite’s traditional hostility toward commerce and acted as a key catalyst for the mercantilist policies pursued by the southern kingdoms during the first half of the tenth century.