<P> During the Eastern Han, peasants could avoid the month of annual conscripted labor by paying a tax in commutation (gengfu 更 賦). This development went hand in hand with the increasing use of hired labor by the government . In a similar manner, because the Eastern - Han government favored the military recruitment of volunteers, the mandatory military draft for peasants aged twenty - three could be avoided by paying a tax in substitution . </P> <P> There were two categories of Han merchants: those who sold goods at shops in urban markets, and the larger - scale itinerant traders who traveled between cities and to foreign countries . The small - scale urban shopkeepers were enrolled on an official register and had to pay heavy commercial taxes . Although these registered merchants were taxed, an edict of 94 AD ordered that landless peasants who had to resort to peddling were to be exempted from taxation . </P> <P> Itinerant merchants were often wealthy and did not have to register . These itinerant merchants often participated in large - scale trade with powerful families and officials . Nishijima writes that most of the biographies of "wealthy men" in the Records of the Grand Historian and Book of Han were those of itinerant merchants . </P> <P> In contrast, registered marketplace merchants had a very low social status and were often subject to additional restrictions . Emperor Gaozu passed laws levying higher taxes, forbidding merchants from wearing silk, and barring their descendants from holding public office . These laws were difficult to enforce . Emperor Wu targeted both the registered and unregistered merchants with higher taxes . While registered merchants were not allowed to own land, if they broke this law their land and slaves would be confiscated . However, wealthy unregistered merchants owned large tracts of land . Emperor Wu significantly reduced the economic influence of great merchants by openly competing with them in the marketplace, where he set up government - managed shops that sold commodities collected from the merchants as property taxes . </P>

How did the han dynasty bring prosperity to china