Organizer: Linda Grove, Sophia University
Chair: Takeshi Hamashita, Tokyo University
This panel grows out of a joint research project on commercial networks in Asian trade begun more than five years ago. While working on a series of studies of trading networks among Indian, Japanese and Chinese merchants in various parts of Asia we frequently encountered questions about fundamental patterns of intra-Asian trade for which there seemed to be few answers.
Although trade questions have been central to various interpretations of modern Asian history, most debates have centered on relatively short-term shifts in commodity and financial flows, or have looked at changes in the patterns of trade as they affected only one national economy. We set out to examine long-term patterns of production, trade and consumption of a group of commodities that have been important in Asian trade. We were not only interested in the competition between various Asian countries in major export industries, but also in the ways in which the intra-Asian trade affected production, exchange and financial settlement in each of the trading regions over longer periods of time. The original project looked at eight commodities: cotton, silk, sugar, tea, rice, marine products, opium and silver. This presentation will include five of the participants in the group project, and look at the opium trade, the cotton trade, and trade in silver. In addition to the four papers, we will briefly present the results of our statistical studies of all of the commodities, which make use of trade data from Japan, China, and India.
Indian Opium Trade
Sayako Kanda, Keio University
Although the basic statistical data on India’s export of opium are available in the British Parliamentary Papers, and on China’s opium imports in the Maritime Customs reports, there have been almost no studies of long-term developments of this trade. For 140 years from the late 18th century until the abolition of the trade in 1917, opium played a major role in Indian trade. Not only was opium a major source of English profits in the China trade, it was also a major source of income for the colonial government in India.
This paper will examine the differing economies of production and trade in India’s two biggest opium-producing regions, Bengal and Malwa. In the late 18th century both production and sales in Bengal were government monopolies. Malwa opium, on the other hand, was produced freely in the native states of central India, and was sold to private traders at prices three times those current in Bengal. In the first half of the nineteenth century, Armenian merchants played a major role in the trade in Bengal opium, and Portuguese merchants involved in the West Indian coastal trade were the chief traders in Malwa opium. English merchants only entered the trade in large numbers after 1819.
Although Indian exports to China had led to a greatly enlarged opium market in China, after 1850 Indian exports stagnated as domestic production of opium in China increased. After 1880, exports to the Straits Settlement came to play an increasingly important role in Indian opium trade.
Asian Cotton Trade
Linda Grove, Sophia University
Cotton goods were among the first industrial exports from the factories of England and the United States to Asia, and the impact of cotton goods exports on indigenous industries in Japan, China and India has been a central theme in the study of Asian economic history. This paper will examine the cotton trade of Asia, focusing on China with references to its major trading partners, including Japan, India, the United States and England.
The cotton trade in Asia included three major categories of products—raw cotton, cotton yarn, and cotton cloth. Different interpretative meanings are usually given to trade in each of the three major categories. In terms of value added, raw cotton is at the low end of the scale, finished cloth at the high end of the scale, and yarn in the middle range. Both raw cotton and cotton yarn were industrial raw materials, while cotton cloth was a consumer item. All three categories of cotton goods were traded throughout the Asian market, as well as between Asia, Europe and the Americas in very complex patterns of exchange, and in some periods individual countries or regions might be both importers and exporters of goods in the same category. This paper will examine the import substitution effects of the development of modern textile industries in each of the major Asian countries, and the impact of changes in production on changes in intra-Asian patterns of trade over a century and a half.
The Flow and Fluctuation of Silver Between China and the World Market, 1830–1910
Takeshi Hamashita, University of Tokyo
Silver was China’s chief means of settling accounts in both the domestic economy and foreign trade from the late 1830s to the First World War. Since there were no institutional controls over the exchange rate of silver until the monetary reform of 1935, the price of circulated silver coin or bullion was determined, in principle, by the value of its components. The Chinese monetary market was directly influenced by fluctuations in the price of silver on the world market. For analytical purposes, we can divide this time span into four periods: (1) From the late sixteenth century to 1830s: during this long period silver flowed into China, first from Spain and Portugal, and then predominantly from Holland and Britain. This silver inflow was in exchange for silk and tea. (2) 1830s and 1840s: the direction was reversed during these two decades and silver flowed out of China and other parts of Asia. This change was brought on partly by the increase in industrial exports from Britain to India after the British East India Company lost its monopoly of Britain’s India trade, and partly by a much larger volume of Indian opium making its way into China. (3) 1850s and 1860s: around 1850, silver began to pour into China again, and until the end of the 1860s, the Western powers kept up a steady advance into China’s monetary market. It was during this period that foreign banks, chiefly British, laid the foundation for later activities in China. (4) From the early 1870s until the end of the nineteenth century: as more European economies adopted the gold standard, the influx of silver into Asia increased, stimulating the powers to compete for monetary control in the region.
The high price of silver from the 1830s to the end of the 1840s was closely related to China’s foreign trade. The focus of this discussion is the relationship between external trade and silver, particularly during the late 1840s. During those years the flow of silver out of China was not just a consequence of structural change in China’s foreign trade. Equally important was the role silver played in paving the way for developments in the activities in trade finance and banking.
Currency Traded as Commodity: China’s Silver Trade in the Early Twentieth Century
Tomoko Shiroyama, Hokkaido University
From the late nineteenth century to 1930 China imported large amounts of silver. During the forty-one years between 1890 and 1930, China recorded fifteen years of excess silver export (1890–92, 1901–8, 1914–17) and twenty-six years of excess silver import (1893–1900, 1909–13, 1918–30). China, along with India, was the major global consumer of silver, and Shanghai the most important silver market. Silver bullion was brought to Shanghai from either London or New York, the two leading silver trading centers. This surplus in silver trade, however, is puzzling, because during the same period, except for 1891–92, 1894–95, and 1897, China’s commodity trade balance also recorded a net import surplus.
The key issue is that silver was traded as a commodity in the world market, but it served as money in China. This paper investigates China’s silver trade, focusing on this dual nature of silver. From 1873 to 1931, silver depreciated considerably against gold. The downward trend was almost continuous, interrupted by only temporary reversals. Only China, which remained on the silver standard currency system, needed a significant amount of silver for its monetary uses. Since silver in Shanghai was often sold at premium prices compared to the market price in London or New York when the local money market was tight, arbitrageurs (banks, trading companies, or professional speculators) could obtain gains on price differentials. The analysis of this close relationship between silver transactions and foreign exchange on the Shanghai financial market provides us a better understanding of China’s linkage to the international economy.