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Using monthly data set on exchange rates of silver dollars versus silver taels, our paper examines how institutional reform and rapid growth in monetary and financial intermediaries in early 20th century China improve efficiency in money market and promote commercialization.Specifically, We estimate the silver points and the speed of convergence among the exchange rates of silver dollar, and assess the extent to which Shanghai and Tianjin, two main monetary centers of China, were integrated.Given transaction costs, we modeled the spatial arbitrage process, which implies nonlinear dynamics of exchange spreads in the two centers.Based on this, threshold error correction mechanism was adopted to estimate the implicit silver points.The results strongly point toward that silver points that have significantly declined over our sample.The results provide an insight into the efficiency improvement of Chinese silver standard, and the evolution of money market integration across southern and northern China in the early 20th century.Our findings on the dramatic improvement in the 1910s carry important implications for an assessment of economic performance in Republican China.