The empire was separated into four khanates, each ruled by a separate khan and overseen by the Great Khan. The Kipchak Khanate ruled Russia; the Ilkhanate ruled the Middle East, the Chagatai Khanate ruled over western Asia, and the Great Khanate controlled Mongolia and eventually China. The empire reached its greatest extent under Kublai with his conquest of China, completed with the final defeat of the Song dynasty in 1279. He became emperor of China and founded the short-lived Yuan dynasty.
He ruled well, promoting economic growth with the rebuilding the Grand Canal, repairing public buildings, extending highways and introducing paper currency. He encouraged Chinese arts and demonstrated religious tolerance, except to Taoism. His capital was at Beijing (then Cambuluc or Dadu). The empire was visited by several Europeans, notably Marco Polo in the 1270s who may have seen the summer capital in Shangdu (Xanadu?).
Under pressure from his Mongolian advisors Kublai attempted to conquer Korea, Myanmar and Japan. All the attempts failed and the cost of these expeditions and the paper currency he created caused inflation.