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When China Last Ruled the World

Is China a new player on the global stage of trade?

April 13, 2001

Is China a new player on the global stage of trade?

It was around the year 1000 when China rose to the leading position on the world’s oceans. Chinese shipbuilders began to build massive oceangoing junks, up to 300 feet long. They had a capacity of approximately 1,250 tons and were able to carry from five hundred to a thousand people. These ships, the technology for which partly drew on Arab models, were capable of undertaking very long-distance voyages and transporting vast cargoes.

At about the same time, the Indians, Persians and Arabs who had dominated the seaborne trade became distracted by other concerns nearer to home, and the volume of foreign shipping reaching China diminished. This left a vacuum that the newly competent Chinese merchant marine was ready and able to fill.

The Chinese made a series of major technical advances related to their improved knowledge of geography, astronomy, mapmaking and shipbuilding. They invented the compass, which radically improved their ability to navigate. Soon every Chinese ship carried one. They instituted lighthouses and beacons. Far more accurately than before, they observed tides, winds, weather patterns and stars — and they calculated distances and plumbed depths.

Experienced sailors made records of all this new knowledge, and a new genre of technical literature came into existence, consisting, among other things, of marine charts and itineraries and records of islands, currents, and reefs with precise bearings.

The Chinese authorities decisively promoted international trade because it was such a valuable source of revenue. Their policy, initiated soon after the founding of the Song dynasty, was to "invite and stimulate" foreign merchants. Commercial activism took various forms.

In 988, the Chinese emperor dispatched a mission to various foreign countries, bearing elaborate gifts with which to lure merchants to China. At the same time the Song envoys purchased valuable goods, such as ivory and pearls, plants and animal horns for medicinal use, and perfumes, to sell upon their return.

In China itself, government officials in the main trading ports held annual farewell banquets and other celebrations for the encouragement of foreign sailors and traders. Merchant shipping that was blown onto the coast or damaged was taken under Chinese government protection, which included protection from ill-treatment by local officials. If however, those officials succeeded in encouraging foreign trade, they might be rewarded by banquets or promotions.

In this way, foreign trade expanded rapidly, but so did Chinese government control over it — both to maintain its function as an important source of revenue and to restrict the outward flow of hard currency. Customs duties on imports ran at about 10%.The central government maintained monopolies on the most profitable goods, such as ivory, coral, rhinoceros horn and crocodile skins. They banned any private traffic in a number of luxury commodities and retained an option for preferential purchase of anything imported.

The government also kept a close watch on exports. A Chinese merchant going overseas had to declare his intended destination. If subsequently he claimed to have been blown off course to some other place, he had to report it promptly and, if possible, produce evidence. He needed inventory for export items and a receipt for taxes already paid.

Products that could be used to make weapons could not be exported legally, although illicit commerce in iron with Southeast Asia flourished steadily. Nor could rice, presumably in case the surplus should be needed in times of famine or war.

To guard against the threat of piracy, merchants engaged in the overseas trade were allowed to carry arms, but they had to deposit their weapons when they returned to China. If they went overseas again, they could reclaim them.

The surging trade patterns and the taste for luxury that became commonplace during this period in China’s history propelled the country forward after the Mongol invasion in 1276.

Merchants from all over the world came to China. Up and down the east coast, to the ports of Shandong, Zhejiang, Fujian and Guangdong provinces, navigators and traders came from Vietnam, Borneo, Java, Sumatra, Pagan, India and the Middle East — as well as from Korea and Japan and from farther afield.

Adapted from “The Sextants of Beijing” by Joanna Waley-Cohen. Copyright © 1999 by Joanna Waley-Cohen. Used by permission of W.W. Norton & Company, Inc.

Joanna Waley-Cohen is a professor of history at New York University.