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→The Liao Dynasty (simplified Chinese: 辽朝; traditional Chinese: 遼朝; pinyin: Liáo Cháo), 907-1125, also known as the Khitan Empire (契丹國 pinyin: Qìdān Guó), was an empire in East Asia that ruled over the regions of Manchuria, Mongolia, and parts of northern China proper. It was founded by the Yelü clan (耶律 Yēlǜ) of the Khitan people in the same year as Tang Dynasty collapsed (907), even though its first ruler, Yelü Abaoji, did not declare an era name until 916.
Although it was originally known as the Empire of the Khitan, the Emperor Yelü Ruan officially adopted the name "Liao" (formally "Great Liao") in 947 (938?). The name "Liao" was dropped in 983, but readopted in 1066. Another name for China in English, Cathay, is derived from the name Khitan. This is also the origin of the Russian word for China, Китай or Kitay, and that of several other East European languages.
The Liao Empire was destroyed by the Jurchen of the Jin Dynasty in 1125. However, remnants of its people led by Yelü Dashi established Xi (Western) Liao Dynasty 1125-1220, also known as Kara-Khitan Khanate, which survived until the arrival of Genghis Khan's unified Mongolian army.
Since not many Khitan records survive, their early history is based primarily upon Chinese records, which are quite scant prior to the seventh century, though the earliest mention of their existence dates to the fourth century. The Khitan lived on the eastern slopes of the Greater Khingan Mountain range, within the eastern portions of present-day Inner Mongolia. The area is ideal for the raising of cattle and horses, which was the basic source of wealth for the Khitan people. Their culture evolved over the course of centuries, influenced by both conflict and cultural interaction with their neighbors, both nomadic and sedentary. It was also common for Khitan to intermarry with people from neighboring steppe tribes. During the Tang Dynasty in China, it is known that the Khitan were subservient to the Uyghurs who had their capital set in the Mongolian Plateau before their move westward in the 840s. Initial expansion was to the west in the Mongolian plains, filling the power vacuum created by the departure of the Uyghurs. Other steppe peoples residing in the region were the Shiwei, Xi and Tartars. The remaining Uyghurs fled west in the face of the Khitan advance.
Over the course of time, the Khitan had made some important observations. They noticed how the Uyghurs had coerced the Tang Dynasty to pay them tribute. They also saw the fearsome effect steppe cavalry used by the Shatuo Turks, the Kyrgyz, and the Uyghurs had against Chinese military forces[citation needed]. Khitan leaders also apparently made the observation that to become sedentary themselves would mean that they would have to compete with the Chinese on their terms[citation needed], something in which the Khitan would have no hope of success. They knew that they must have access to the resources of China without losing the culture and/or identity that was a critical component of their steppe culture.
From the 750s, a clan using the surname Yaolian had held the title of khan, holding a monopoly on power for more than one hundred fifty years. They had full relations with the Tang Dynasty court. The first Yaolian khan even had the imperial surname of Li bestowed upon him, though no one in the steppe bothered with it. Yaolian khans wavered from alliance with the Tang Dynasty to joining in with coalitions against it. During this period of time, only the Yaolian clan used a surname among the Khitan.
Chinese records refer to eight tribes of Khitan. The most powerful of these tribes was the Yila Tribe. Abaoji was born into this tribe in 872. The Yila Tribe did not use Chinese trappings such as surnames at this time in history, though they did have close relations with China, focusing on their struggle with northeastern jiedushi (military governors) of the Tang Dynasty.