So the best answer i could find on the webs states that the real reason was likely practical: Ancient Chinese coins were cast/poured into moulds, not stamped or milled. If you've ever casted, you know that you get flash, which is material that overflows through the casting molds' joining space. In order to make a uniform coin, after the casting, the coins were put on a dowel or rod so that many of them could be filed down at once. This rod was square in order for the coins to stay stable and not roll while being filed.

Older round Chinese coins did have round holes in them as well, and one effect of this was that the money could be stored on strings.

There are a variety of philosophical meanings assigned to the "square hole, round coin", but these appear to be an after effect from the practical filing needs

On a side note, I am not a fan of Wiki as a source, but the Wiki page on "Ancient Chinese Coinage" is a clearing house of every type of Ancient Chinese coin, all the way back to their "spade money", and cowrie shells! A dedicated numismatist put this together....

Sources:

^[1] Encyclopedia of Chinese Symbolism and Art Motives by C.A.S.Williams, 1960, NY

^[2] The Passing of Korea by Homer Hulbert 1906 (? date questionable)

via:

This website Sources listed above confirmed via google books search and other text searches.

hi! it may be worth x-posting this one to the coin collectors in /r/coins or /r/Numismatics