The Song dynasty established a standing naval force, which was ignored by some historians since Song lost its defensive wars to the Jin and Mongol forces. This article examines improvements and innovations of Chinese naval operations during Song and pays particular attention to how the state economic reforms and state-centered financial system supported naval development. Song’s population growth and demographic changes also provided manpower for the government to maintain a huge army while establishing a large navy. As the new age of naval and siege warfare emerged, gunpowder weapons and new naval technology became more widespread. The Chinese military adapted to naval warfare during the Southern Song because it was economically and technologically possible. The south’s mastery of riverine warfare created a substantial defensive advantage against the north. Thus, when the Mongols later mastered riverine warfare, they penetrated throughout the south.