The Dragon Goes to Sea

Model of Battle in Bach Dang River in 938 AD

When the rulers of China and Japan thought about trade they were constantly aware of the distinction between tribute, received in exchange for gifts, and private trade. Buddhism tended to encourage moneymaking, and even Buddhist monasteries traded actively, including those in Kyoto. In ancient and medieval China, attitudes were more complicated. From the perspective of some of the most influential exponents of Confucian thought, as in ancient Rome, trade was something inherently rather disreputable. Tribute, on the other hand, expressed acknowledgement of the superiority of Chinese (or Japanese) civilization over those who brought it, and fitted very well into Confucian ideas of hierarchy and the respect of those lower down the social and political scale for those higher up. Nations had to be ranked just as courtiers were; and calling many of them ‘barbarian’ was a way of saying that, if they knew their manners, they would pay tribute. Japan and Korea were occasionally treated as civilized nations, but this was not automatic, and the assumption that they were culturally inferior remained firm. The condescending attitude to Roman envoys, which was mentioned earlier, reflected both an awareness that there did exist another great empire far to the west, and an unwillingness to treat it as the equivalent of the Heavenly Kingdom ruled by the Chinese emperor. Tribute had another function beyond the political: the imperial court genuinely craved exotic luxuries, either for its own use or for redistribution to members of the ruling clan, great nobles and the army of scholar-officials who had earned their place at court by passing the most difficult examinations in human history. The imperial court was not greatly interested in the availability of foreign luxuries to the wider population, while the vast majority of the emperor’s subjects in any case lived barely above subsistence level. For many of them, ship-borne trade meant the thousands of large rivercraft that carried huge amounts of grain from the estates where they toiled to the big cities that – particularly from the tenth century onwards – were gobbling up the grain and rice they cultivated.

All this should not be taken to mean that trade was outlawed when the Chinese emperors demanded that exchanges should consist of tribute. Embassies were large and their members carried goods that they traded privately. Besides, there were plenty of opportunities to escape the surveillance of the Chinese customs offices, or shibo, whether one was a Chinese, a Japanese, a Korean, or even a Malay or Indian merchant. The tribute/trade alternative was a fiction maintained at some periods at the Chinese court and revived by historians who had perhaps read too many official documents, and who did not yet have access to the rich archaeological evidence showing that vast amounts of copper and porcelain left medieval China by sea, to which one can confidently add goods that have not tended to survive so well underground or under water, notably silk textiles. In reality, there was no period in Chinese history when overseas trade consisted solely of exchanges of tribute against gifts; nor did the court want that to be the case, so strong was demand at court for exotic goods from the Indian Ocean, the interior of Asia and beyond: emeralds, rock crystal, lapis lazuli, only to mention a few types of precious stone. The best cobalt for making the famous blue-and-white porcelain of the Ming period came from Iran. Although some was produced in China itself, sugar, which was first cultivated in Borneo, became a favourite import as well, for it still had great rarity value, and was prized in the medicine cabinets of the Chinese nobility.

Only at the start of the third millennium has China energetically begun to build a large navy, at the same time as it has been reasserting long-forgotten claims to rule over most of the South China Sea. Yet in the Song period, from the tenth to the thirteenth century, China did turn towards the sea and did encourage overseas trade; interest in trade became even stronger after 1126, when the north of China was lost by the Song and the ‘Southern Song’ reigned in their capitals first at Kaifeng and later at Hangzhou. Kaifeng is famous as the major centre in China of Jewish merchants, who over the centuries became quite assimilated into Chinese culture (while still avoiding pork, like the Muslims, with whom they were often confused); these Jews appear to have arrived from Persia and India, and continued for centuries to speak a form of Persian among themselves, and some are thought to have arrived by sea, since there were also communities in Quanzhou, Hangzhou and other cities close to or beside the sea. This is just one example of the different ethnic and religious groups that filtered into China as its trade to the wider world opened up.

Meanwhile, Chinese merchants established themselves in overseas ports as far south as what is now Singapore; there, they were rather modest folk, and rather than trading all the way to China they made it their business to wend their way back and forth across the strait, visiting the Riau islands (now part of Indonesia) and Johor (the southernmost province of mainland Malaysia), working closely with Malay partners and with the big-time Chinese traders who passed their way every now and again. A Chinese colony in Korea can be traced back to 1128. Sometimes these expatriate Chinese married local women, as in Japan. This also occurred in Champa, in Indo-China; there, some of the Chinese women were wealthy enough to invest in trade, though it is unlikely that they would have taken the risk of actually travelling long distances on board ship.

The Song dynasty presided over what has been called a ‘commercial revolution’, during which a major international centre of trade emerged at Quanzhou, which will be examined shortly; and it was a time during which the central government reaped rewards in sizeable tax revenue.6 Still, the scale of this revenue should not be exaggerated. It stood at less than 2 per cent of total revenue from all the economic activities in lands under Song rule. That said, the wish to foster overseas commerce reflected new attitudes: the imperial dynasty did not simply require luxury goods for itself; it also had to find the means to pay for its exceptionally heavy spending programmes, which were consumed as much by grandiose projects at Hangzhou and other centres of power as by constant warfare on the Song frontiers, notably with the Chin dynasty that held on to power in northern China. By encouraging trade and industry (including the production of silk and porcelain, both of which were exported in large quantities), and by building shipyards and harbours, the Song emperors moved a little way towards closing the large gap between income and outlay.

The turn to the sea took place gradually. The first Song emperor, Taizu, had experience of naval warfare before he gained the throne in 960; he maintained a war fleet and enjoyed staging mock sea battles, although most of this force was deployed along the rivers and close to shore. Naval wars against Annam and Korea took place during the tenth century, suggesting that the knowhow for ocean voyages did exist; however, the major task of the navy, which was treated as an auxiliary service lower in status than the army, was the suppression of piracy. Piracy betokens trade. Trade was the motive for the majority of sea journeys away from the coast of China in this period – either that or pilgrimage, which accounted for much smaller numbers of travellers. In 982 the imperial court gave way to pressure from Chinese consumers, who were complaining that they could not buy the foreign aromatics they craved. No doubt the need to use these perfumes in temple worship influenced the decision to permit thirty-seven different perfumes to be released from government control. Merchants could now trade in them without having to take them to official markets. This did not bring about a business revolution, but it marked the beginning of gradual relaxation of control over the movement of goods. Within a few years, the government had doubled customs duty from 10 to 20 per cent, while withdrawing further from control of the markets. The imperial court now saw commercial taxes rather than the direct management of goods as the best way to profit from trade.

All this was accompanied by a shift away from reliance on tribute to an acceptance that overseas trade was profitable not just for merchants but for the government: foreign merchants were increasingly welcomed in ports along the coast of the South China Sea, and, from 989 onwards, Chinese merchants were given the freedom to sail abroad. They still had to register their arrival and departure, and they were expected to return within nine months to the port from which they had originally sailed, so that their goods could be weighed and taxed. This meant that they could only be absent for a single monsoon cycle, and that they could not range as far as they would have wished, beyond the Strait of Malacca and into the Indian Ocean. A very intense network of exchanges within the South China Sea came into existence, as Chinese merchants with their substantial amounts of cash boosted existing networks within the area, and as Song traders did business alongside Malays, Thais and other non-Chinese peoples. At the start, only two ports, Hangzhou and Mingzhou, were designated as departure points, with Guangzhou added later; but it became obvious by 1090 that these restrictions did more harm than good, and thereafter ships could set out from any prefecture that was willing to issue permits. In the middle of the eleventh century foreign products officially imported into China were said to be worth over 500,000 strings of cash, and the amount continued to rise, reaching 1,000,000 before 1100. Meanwhile, in 1074 a century-long ban on the export of copper cash was abolished, enabling Chinese merchants to satisfy strong foreign demand for Chinese bullion; payment in cash became the normal way to settle foreign bills, rather than barter and exchange, though every now and again paper money was issued in the hope of stemming the flow of copper outwards, and there were schemes to mint iron coins for the use of foreign merchants. Liberalization of maritime commerce worked; a commercial revolution was indeed under way. The fact that another commercial revolution was under way in the Mediterranean and northern Europe (particularly in Italy and Flanders) at the same time is a curious coincidence. However, both commercial revolutions would have a similar effect in the Indian Ocean and south-east Asia: demand for spices and perfumes grew exponentially, and the produce of the Indies was sucked north to China and west towards the Red Sea and the Mediterranean.

What has been described so far was not simply a change in economic orientation. It was also a change in China’s attitude to the outside world. The land routes that traversed the long and fragile Silk Road across Asia were too vulnerable to withstand the pressure of nomadic raiders; their importance, always overestimated by romantic historians, diminished still further, though there was a revival later during the Mongol period (from the late thirteenth to the late fourteenth century). But the sea was the great highway, and in the Song period Chinese travellers as well as Malays and Indians followed its routes. The Song period stands out as a period of three centuries during which China remained more accessible, and took more interest in contact with its neighbours, than at any other time. This openness, though only relative, became more obvious after 1126, when the Song capital at Kaifeng was captured by northern nomads, the Jurchen, who created an empire of their own in large tracts of northern China, with the result that the Song court decamped from Kaifeng and made Hangzhou its centre of operations. The northern lands were the very areas that had been afflicted by floods, droughts and wars, and their wealth seemed to be in sharp decline, while southern China flourished: new irrigation works boosted the production of rice, and stimulated population growth, while gold, silver and copper flowed into the Song court from taxpayers in the southern provinces. This boded well for the maritime traders, as Hangzhou lay near the coast and already functioned as a licensing station for ships setting out across the South China Sea.

The imperial court was not blind to the opportunities that now loomed. Honours (consisting of an official rank) were showered on merchants who brought in foreign goods worth 50,000 strings of cash, and tax officials who had managed to collect more than 1,000,000 strings from the massive trade in frankincense were also accorded higher rank. Lists were compiled of the types of goods that were arriving by sea, and differential rates of tax were imposed, depending on whether they were regarded as high- or low-value commodities. Reversing earlier decisions to cash in on trade by sea by charging high customs rates, the imperial court pushed these rates down to 10 per cent, and to 6⅔ per cent for lower-value items in 1136; and, far from depressing revenues, this acted as a stimulus to private shipowners, so that by the middle of the twelfth century the imperial court could congratulate itself on revenues of 2,000,000 strings of cash each year. Oddly, the rates on some luxury goods required at the imperial court, such as rhinoceros horn, were increased in 1164 and remained at the same level until the Mongols overthrew the Song in 1279; but this only pushed the maritime traders towards a greater emphasis on the lower-value goods, such as drugs and perfumes, which were moving around in much larger quantities and which were in demand beyond the narrow circles of the imperial court.

The effects of urban growth reached much deeper into Chinese society. As people moved towards the cities and as the balance between urban and rural population changed, demand for foodstuffs in the cities soared. This led to the development of commercial networks in the countryside as well, as farmers produced for the urban market. Foreign demand for Chinese goods stimulated the industries for which China was most famous: silk production and the ceramics industry. Other exports to south-east Asia included Chinese metalwork, iron ore (sometimes found in wrecks) and rice wine, contained in ceramic jars. But copper, whether as ingots or as cash, was in constant demand. One way to ensure that the outflow of copper cash did not drain all the bullion out of coastal China was to dump vast amounts of ceramics in foreign markets (though the term ‘dump’, favoured by economic historians, should not be taken to indicate that what was dumped was rubbish – the ceramics were much appreciated, but the quantities were massive). Commercialization proceeded rapidly. The coastline grew in importance as a source of wealth for rulers and ruled. China was being transformed. All this seems uncannily similar to what has been happening in China since the 1980s, even if the scale of economic growth in modern times is immeasurably faster and vaster.