Many people think ‘globalization’ is a new phenomena, but it’s roots trace back to the 16th Century, and it has much to do about silver. Here’s more…
Half Dollar’s Notes: This is an excerpt from a series on the history of the silver trade in China. This chapter, as well as four others, are posted on the South China Morning Post and can be found using this link. It is well worth it for some great ‘weekend reading’.
by Adolfo Arranz and Marco Hernandez of South China Morning Post
How silver changed the world
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.
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.
The colonial mint 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.