Final answer:
China established a new money system during the time of the Silk Roads, using paper currency. This eventually led to the importation of silver from Europe to stabilize China's monetary base. The trade between China and Europe had significant economic and political implications for both regions.
Step-by-step explanation:
The new money system that China established during the time of the Silk Roads was the use of paper currency. The Mongol rulers issued paper money as a means of payment for government transactions. However, the excessive printing of paper currency led to inflation, as there was not enough metal or silk to back it up, resulting in a decline in purchasing power. This eventually led to a need for importation of silver from Europe to stabilize China's monetary base.
As a result, the Europeans began trading with China and brought silver in exchange for Chinese goods. This increased China's trade with Europe and led to a favorable balance of trade, with a large amount of silver flowing into China. The influx of silver from Europe also had a significant impact on the European economy, as it allowed for the growth of a wealthy merchant class and contributed to the development of financial centers in Europe.
The new money system in China and the trade with Europe had profound effects on both regions. China's reliance on silver and its resistance to importing European goods maintained its economic position, while Europe's access to Chinese goods fueled its economic growth and the development of the middle class. The establishment of trade routes and the exchange of goods between China and Europe also had political implications, leading to colonization and empire building by European countries.