The public-works projects that the Mongols initiated in China — the building of the capital city in Daidu (Beijing), the construction of a summer capital in Shangdu (Xanadu), the building of roads and a network of postal stations, the extension of the Grand Canal — were all extraordinarily costly. [Map Link]

All these projects required vast investments of labor and capital secured through inordinately high taxation upon the peasantry and the merchants. Toward the end of Khubilai Khan's reign, the Mongols resorted to a deliberate inflation of the currency to cover costs. Those who administered these policies — the financial administrators who initiated the additional taxation or inflation of the currency — were mostly foreigners, such as Muslims and Tibetans, that the Mongols had brought in from their other domains.

These fiscal problems undermined the economy, and before long the Mongols could no longer maintain even the public-works projects traditionally supported by the native Chinese dynasties, such as the Grand Canal or the irrigation-control projects along the Yellow and Yangtze Rivers. The results were predictable.

In the 1340s terrible floods erupted, changing the course of the Yellow River and leaving a large group of people homeless and wandering around the countryside amid much confusion and destruction. Ultimately, some of these bands of unemployed and homeless peasants united into a rebel force, and in the 1350s began the process of ousting the Mongols from China. By the mid-1360s, many of the Mongols had already returned to Mongolia, and the Ming dynasty, a native Chinese dynasty, finally took back control of China in 1368.