During the reign of Emperor Xiaozong, the Chinese increased the number of trade missions that would dock at ports throughout the Indian Ocean, where Arab and Hindu influence was once predominant. Xiaozong also was responsible for
Yue Fei's posthumous rehabilitation, clearing out the remnants of
Qin Hui's faction in court, and stabilizing the economy making his reign the most powerful era of the Southern Song Dynasty and it's said he was the best ruler of the Southern Song dynasty. The Emperor also controlled his ministers by curtailing their authority. Early in 1167 the Emperor finally filled every vacancy in the Council of State by appointing chief councilors of the left and right and two assistant councilors. The bureaucracy was generally pleased with the appointments, but the remarks of the vice-minister for war, Chen Yanxiao, contained both jubilations over the appointments but skepticism over the reduced powers of the councilors. Although Xiaozong is said to have listened to Chen, he never put his advice into practice. Throughout the Xiaozong reign the chief complaint of officials was his is tendency to infringe on their authority. Xiaozong in principle realized the importance of treating his councilors with dignity and granting them executive authority, however in reality his participation in all major decisions greatly limited their authority. In 1163 chief councilors were appointed to positions of Commissioners of military affairs, and in 1167 they were also granted financial authority with the titles of controller of national finance (
Zhi Guoyongshi). Later in Southern Song this contributed to the power of the chief councilors, however during Xiaozongs reign this was not the case. Xiaozong intended for his ministers to exercise their powers in ordinary administrative affairs, however the emperor was in the habit of guarding his imperial prerogatives and frequently exercised them especially in military matters. As in 1167 when Imperial orders issued to the Bureau of Military affairs bypassed the
Secretariat and Imperial Councilors and went straight to the
Imperial Chancellery. After requests to the Emperor that orders go through regular bureaucratic streams he promised to rectify this, but instead he continued to issue direct dispatches as "confidential orders" (
mi-pai). Xiaozong began to directly issue palace orders (
nei-pi) and imperial decrees (
yu-pi) without prior consultation with councilors to enhance his power in other areas. He closely supervised the
court and
central government to make sure power remained balance among high officials and tried in earnest to live up to Confucian standards of moral behavior. In 1165, he reached peace with the
Jin Dynasty. In the Southern Song years, revenue from state monopolies on tea, salt, and
jiu, along with commercial taxes, was crucial to the state's finances and was increasing. During Emperor Xiaozong's late Chunxi period, summer and autumn agricultural land taxes dropped to 20.4 percent and 15.3 percent of total revenue of the government compared from the reign of
Emperor Shenzong. In 1187, the retired
Emperor Gaozong died. Xiaozong was stricken with grief and retreated from governing, insisting on mourning Gaozong and stating that he would only rule for two more years. Xiaozong turned all government affairs to his son
Zhao Dun. In 1189, Emperor Xiaozong abdicated in favour of his son,
Zhao Dun who took the throne as
Emperor Guangzong. He then granted himself the title
Taishang Huang and remained as the
de facto ruler. Xiaozong is also said to have been suffering from mental illness in the last two years of his reign, which encouraged him to follow the example of his stepfather
Gaozong and retire. == As Retired Emperor ==