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 Following their invasion, the Mongols confiscated a vast amount of arable land and turned it over to pasture. State owned land was often granted to Mongol aristocrats and to Buddhist monasteries. These actions coupled with harsh taxes impoverished the peasant farmers, many of whom migrated to the South. Due to their ignorance of the need to control flooding, the Mongols neglected river defences and the Yellow River shifted its course with a resultant large loss of life. The incorporation of China into the Mongol empire did little to help their economy as so much trade was under foreign control. As trading profits were taken out of China, the metal currency was depleted and this led to the use of paper money and inflation. Large scale corruption existed and this together with the Mongol desire for splendor such as demonstrated by their building of Dadu caused impoverishment.
Under Kublai, things were improved. He brought together groups of fifty households to develop land for agriculture, to improve flood defences and irrigation. This encouraged silk production. He also promoted the interests of artisans and merchants. He supported Ortogh, an association of mainly Muslim traders, who managed the trade along the Silk Road. He made wider use of paper currency but ensured its value was backed by adequate supplies of silver. This was an encouragement to commerce and with the construction of roads, improved canals and a postal system economic activity was enhanced.
Towards the end of his reign, economic problems started to escalate. His foreign expeditions and massive public works programs such as the extension of the Great Canal imposed a heavy burden on the country's exchequer. Kublai employed a series of semu finance ministers who were very unpopular as a result of their taxation methods. His successors continued to suffer from financial problems which they endeavored to control by raising revenue from monopolies, currency manipulation and the profits of a growing maritime trade. Ayurbarwada instituted a land census with a view to ensuring all holdings were suitably taxed. This led to strong opposition and so land owners in the South were left to prosper.
In the North and to a lesser extent in the South, the Mongols rewarded their followers with grants of land together with rights over the tenants upon it which meant households were placed in bondage. The government sought to control the exploitation of such households but continued internal migration indicates that this was not altogether a success. Although the Mongols did encourage agriculture, the number of peasant uprisings towards the end of their reign shows that rural life was harsh during the Yuan period. In the fourteenth century, China suffered thirty five severe winters and in 1332 abnormal rainfall, with consequent flooding which was the cause of much loss of life.
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