European - Asian Trade

A lucrative trade relationship between Europe and Asia has continued to evolve since the Roman empire.

Regular commercial activities between Asia and Europe, which invigorate the current global economy, date back to the pre-Christian era. For centuries until the late 1400s, Asian commodities—silk, porcelain, jewels, precious metals, spices, textiles, and other luxury items from China, Japan, India, and Southeast Asia—found their way to Europe through the Middle East and the Mediterranean involving a multifaceted web of trade contacts. The Silk Road (the English equivalent for the term seidenstrafe coined in 1877 by Ferdinand von Richthofen, a German explorer) represented a major transcontinental trade route linking East Asia with the Mediterranean. A complex network of caravan transportation that joined East and West, the Silk Road had its starting point in northwest China, traversed across Central and West Asia, and linked up with trade trails spurring into south Iran, the northern Eurasian steppe, and the Indian subcontinent. Goods originated from East or Southeast Asian countries also arrived in Europe by way of the sea routes that connected the south and west coasts of India with the ports in the Red Sea and Persian Gulf. Central Asian and Indian merchants served as pivotal intermediaries for the land or sea traffic of Asian products to the Mideast or Mediterranean hubs of distribution for the European markets.

Early Modern Era

The structure of the European-Asian commercial nexus changed following the Portuguese discovery of a direct sea route from Europe to India by way of the Cape of Good Hope in the late fifteenth century. The sixteenth century witnessed the rise of European maritime commerce with Asia. Portugal, as a global naval power, took the lead in a European effort to dominate all seaborne access to the Asian trade. The Portuguese merchants aspired to monopolize the lucrative trade of pepper and other spices with Southeast Asia. For more sources of profits and new Asian commodities, they also sought direct commercial contacts with East Asia, China, and Japan in particular. At the turn of the seventeenth century, the Netherlands and Britain started to challenge the Portuguese control of all-water routes from the Atlantic to Asia. Each country established its own East India company as the novel trading institution in a quest for a superior status in the East-West commerce.

As a state-chartered association of merchants and bankers, the Dutch East India Company represented both a national desire for mercantilist gains and private commercial interests. By armed conquests, the company took Taiwan (or Formosa), Melaka (Malacca), Ceylon, and the Indonesian archipelago as convenient footholds and trading posts for commercial expansion in East and Southeast Asia. While losing Taiwan to the Chinese empire in the mid-1600s, the Dutch became dominant in the European trade with Southeast Asia. The Dutch East India Company, as a trading monopoly, not only helped increase the volume and value of European-Asian commercial exchange, but also adjusted the variety of Asian commodity exports for the Euro pean market. Since Asia had little demand for European products, the Dutch East India Company competed with Asian countries and won a principal role in the multilateral intra-Asian transshipping business and used the profits earned to finance the purchase of Asian goods for the European market.

British East India Company

Though less successful than the Dutch counterpart during the seventeenth century, the British East India Company represented a joint-stock venture rather than a loose alliance of merchants and had potential for a systematic operation. When Britain achieved the status of a hegemonic world power in the eighteenth century, the company conquered the Indian subcontinent as a central base for the British political and economic advance in Asia. By 1800, Britain had become the leading European dealer of Asian merchandise but, as the predominant industrial country in the West, the nation also desired Asia as a market for its own manufactured products. Using military prowess, the British government forced Imperial China to open its domestic market for British goods in 1842.

In addition, the British acquired an emporium of colonies in Asia as sources of raw materials and labor, entrepôt posts, and markets, thereby shaping a new pattern of European-Asian trade. Other European powers—France, Germany, Italy, and Russia, for example—joined the rivalry for colonial concessions and spheres of influence in Asia during the rest of the nineteenth and the early twentieth centuries. Japan, the only Asian modern military and naval power that had emerged by the first decade of the twentieth century, also joined the zero-sum struggle for colonial rule and challenged the European presence in Asia as a major hurdle for its own imperialist expansion. Nationalism also gradually gained momentum across Asia. Nonetheless, the European-dominant status (as represented by the British, French, and Dutch colonial empires) in Asia remained basically unchanged until World War II.

Post–World War II Era

The postwar European-Asian commercial relations evolved with the vicissitudes of national politics and ideology in various Asian countries. China, where the Chinese Communist Party came to power in 1949 and took an anti-Western position in its foreign policy, elected to be exclusivist toward those West European industrial countries. The Chinese communist government conducted international trade (on a barter basis) essentially with the Soviet Union and its East European communist bloc until an ideological split induced a hostile Sino-Soviet relationship in the early 1960s. The colonial Asian nations won their national independence. Most of them, in trying to develop the modern economies of their own, kept active commerce with their former rulers in Western Europe. Meanwhile, a new democratic Japan gradually developed into one of the world’s major manufacturing and trading countries and a principal trade partner with Western Europe. In the 1970s, the new Asian economic powers—South Korea, Taiwan, Hong Kong, and Singapore—followed suit as prominent importers and exporters in trading with Europe. During the 1980s and 1990s, China broke away from the archetype of a state-planned economy and embraced a capitalist market economy for modernization. By reopening its market to the outside world, diversifying its production, and developing new industries, China ascended to the position of a fast-growing producer and consumer in the world. European—especially west European—trade with this largest East Asian nation experienced a quantum leap. With these new developments continuing, the European-Asian commercial relations were generally moving toward a type of market-oriented interdependence as the twenty-first century dawned.

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Eurasian Trade Routes, 1450 As the European Middle Ages came to a close in the late fifteenth century, overland and sea-and-land trade routes between Europe and East and South Asia were extensive. The fall of the Byzantine Christian city of Constantinople to the Muslim Turks in 1453 cut Europe off from its overland routes to Asia, forcing countries and entrepreneurs to seek all-sea routes to the East. (Mark Stein Studios)

Guoqiang Zheng

See also: British Empire; China; Silk Road.

Bibliography

Prakash, Om, ed. European Commercial Expansion in Early Modern Asia. Hampshire, UK: Variorum, 1997.

Teichova, Alice, ed. Banking, Trade and Industry: Europe, America and Asia from the Thirteenth to the Twentieth Century. New York: Cambridge University Press, 1997.