The original economic activities of the Khitan were stockbreeding, fishing, and hunting. But under the influence of the neighboring states, the Khitan soon engaged in farming and cropgrowing, but almost exclusively in the southern and western parts of their territory where the Chinese made up a great part of the population. The Liao aristocracy later still undertook hunting campaigns in late summer in the tradition of their ancestors. While the Chinese and Bohai farmers cultivated wheat and sorghum millet, the Khitan farmers especially cultivated panicled millet.
In the field of handicraft, the slaves of the Liao society contributed to a great part to the expanding of a sophisticated art in the casting of iron tools for hunting and battling, but silver and gold work of the Liao craftsmen developed to a high standard. Gold and silver work is especially seen as harness for horses, table-ware, adornments, but also for Budda statues. The horse saddles of the Khitan were told to be of first quality. The porcelain production was also known by Khitan craftsmen, and their earthen drinking bottles - glazed with dark yellow varnish - have still the unique shape of the traditional drinking bags made of leather that were fixed at the saddle. Silk weaving, paper making, and woodprint were also known to the Liao craftsmen.
The picture to the right is a coin of the Liao Dynasty inscribed with Khitan script
The trade centers of the Liao empire were the five capitals. In the "Upper Capital" 上京 (Linhuangfu 臨潢府, modern Kailu
開魯/Inner Mongolia) the southern part of the capital was inhabited by Chinese and Uyghur merchants. All capitals had markets that were organized and controlled by special market overseers that had also the duty to tax the merchants. The main export good of the Liao empire were sheep, horses, pearls, and iron knifes, while the import goods from the Song empire 宋 were tea, medicine, silk, lacquer, porcelain, coins, and - books.
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