Abstract: The national government of Nanjing made efforts to promote the currency reform and maintain the national monetary sovereignty since its establishment. However, this reform was destroyed by Japan. In order to get rid of the impact of the economic crisis, Japan hastened its financial aggression against southeastern China in 1930s and undermined China’s monetary sovereignty. The silver wave, which has been caused by US, affected China’s economy and society. In response to the financial crisis, the national government decided to implement the reform of legal currency. For reasons of strategy security, the reform scheme was extremely confidential to Japan. All social circles of Japan were indignant with the reform of legal currency, and thought it as an “antiJapan” movement. Therefore, Japan blocked and destroyed the reform with diplomatic threats, economic damage and political interference. On the one hand, the national government adhered to the principles and promote reform as well as made the cautious response to it. In fact, the ChinaJapan game and contest before and after the reform of legal currency was the competition between the China’s national monetary sovereignty and Japan’s socalled “suzerainty”. Japan underestimated the financial management capacity of the Kuomintang, misjudged the developing trend of the world currency, and failed finally in the "currency war".

Key words: national monetary sovereignty, legal currency reform, ChinaJapan game, financial governance