Saturday, June 27, 2020

The China Ship: "How silver changed the world"

This is Chapter 4 of the South China Morning Post's series that began with The China Ship:

The main objective behind the sea route plied by Spanish galleons was to establish trade with China.
These European vessels became known as China Ships. They transported silver from the Americas to exchange for goods in Asia, mostly commodities of Chinese origin

It can be argued that when Spain instituted a common currency in the form of the Real de a Ocho, also known as Pieces of Eight, or the Spanish dollar, globalisation’s first chapter had been written. The acceptance of the dollar coins for commercial transactions throughout Asia, the Americas and much of Europe, resulted in a cultural exchange between nations, as well as the relatively free movement of people and goods between the three continents
Global trade
China had an appetite for silver ...
When the Spanish tried to establish commercial ties with China they found little taste for goods from the outside world. However, it transpired the Chinese had a voracious appetite for silver. In fact, during the latter part of the 16th century, during the Ming Dynasty, Beijing ruled taxes should be paid in silver, and without domestic recourse to the precious metal, the demand for imported silver soared

Spain’s colonies in the Americas could mine enormous quantities of silver and the Spanish began to export the commodity to China via their Manila connection.

The colonial mine was located in the Bolivian city, Potosí, for several centuries. At an altitude of 4,000m, Potosí lies at the foot of the Cerro de Potosi, a mountain popularly conceived as being made of silver ore. China’s insatiable demand for silver led to increased production in the Bolivian highlands and by the late 16th century Cerro de Potosi alone produced an estimated 60 per cent of all silver mined in the world

… while the West hungered for goods from China
Many of the products imported into New Spain were highly coveted luxury goods. Silk was popular, both in its raw form and finely embroidered, as was porcelain, diamonds, pearls, ivory and wooden furniture. Cotton from the Philippines, and other parts of Asia, became highly profitable due to the high quality. Other products in demand were spices, tea, Indian linen, amber, swords and knives, potassium nitrate for gunpowder, and mercury, for industrial use to mine silver

Manila as central hub of Asia
Over the years, Chinese commercial vessels began to arrive in Manila with increasing regularity
Junks and other small boats sail between March and June to avoid typhoon season and the southwest monsoon rains
Manila was ideally located as a major trading port for Chinese goods which were highly coveted in Europe and America. The Chinese community in Manila grew exponentially to keep pace with the booming trade. Manila also provided sailors with respite before their long and arduous journey to Acapulco, the Spanish base where galleons would unload and trade their goods for silver ingots, and later, coins

The Chinese who left their ships to settle in Manila often set up shop as traders. Many of the Chinese merchants in Manila took residence in an area adjacent to the Intramuros – a walled city hosting most of the Spanish colonial and administrative buildings. Known as Parián, this area quickly became the commercial centre of Manila. There were over a hundred shops prospering, and it was here that products arriving by junk from China were traded. Chinese who converted to Christianity (called sangleyes by the Spanish) were able to expand their business interests to other provinces in the Philippine islands
Growth of Manila’s Chinese population
Over the years Manila’s population became one of the most diverse in the world, with people settling there from Spain, France, England, Italy, Flanders, Germany, Denmark, Sweden, Poland, Russia, Turkey, Greece, Persia, Africa, as well as Tartars, Chinese, Japanese and others from across Asia
Acapulco and Mexico City
New Spain, especially Acapulco and Mexico City, began to depend on the China Ships for the open trade route. When galleons arrived in Acapulco they were greeted with much festive activity. There were joyful celebrations starting with Mass and followed with parties and market fair....

The discovery of the roundtrip and the beginning of globalisation"
The China Ship Chapter 2: "Galleon of China: flagship of trade over two centuries"
We skipped over:
Chapter 3 A journey of dread

If interested see also June 19's "The First Global City" on the Potosi -Manila connection, it was a pretty big deal.