(Brief) History of European – Asian trade



Early contacts

Trade with the East has a long history. From time immemorial, southern Arabia had been a trading centre for frankincense, myrrh, and other fragrant resins. Initially goods were transported by caravans – with as many as 4,000 camels – but arab traders started sailing directly to spice-producing lands before the Christian era, mainly India but also Ceylon, a producer of pearls, cinnamon and cardamom. Further East, Malays and Chinese sailors fetched spices from the Moluccan Islands.

Prized for their flavor, spices such as cloves, nutmeg and mace were also believed to cure everything from the plague to venereal disease, and were literally worth their weight in gold.

In the first centuries of the Common Era, the Romans carried out significant trade with India and beyond through their Egyptian Red Sea ports. As early as 165 AD, there were traders living in Canton who considered themselves Roman subjects. Activity was extensive for more than three centuries and then began to decline. India provided spices (mainly black pepper) and aromatics, quality textiles with brilliant dyes, ivory and gems. In return, India received coral, wine and papyrus but mainly gold and silver coinage.

IN China, Canton was the starting point for the ‘Maritime Silk Road‘ that went to India, southeast Asia, the Middle East, and Africa. In 627, a mosque was established in Canton and by 1405 the number of foreign traders was so large that an area of the city was set aside for them. Later, Canton would remain China’s main point of contact for Europeans.

In the 10th century, both Venice and Genoa began to prosper through trade in the Levant and Europeans became aware of the fabulous wealth of kingdoms to the East from the luxury goods, like spices and silk, that came over the land routes. In 1380, Venice defeated Genoa and secured a monopoly. It passed on its goods to distributors, like the Dutch, in northern and western Europe and made exorbitant profits over the next century. A number of Europeans, many of them Christian missionaries, had sought to reach China, the most famous being Marco Polo (1254-1324). But these journeys had little permanent effect on East-West trade because the Turks controlled the eastern Mediterranean and allowed only minor exchanges with Asia.

This map of the ancient trade routes shows the position of the fabled Spice-Islands (Moluccas)
between Borneo and New Guinea. Only there can cloves, nutmeg and mace be found.
Other prized spices were: pepper, ginger and cinnamon.

Western rulers dreamed of finding alternative sea routes that would bypass the established channels and give them direct access to the wealth of the East. Finding these routes required knowledge, time and money and exploration could only start when feudal lands had merged into unified countries. Over the years, leadership in exploration and trade shifted from one nation to the next. The table below gives a rough view of european dominance over time:

Colonial Dominance in Asia
1400-1500 Portugal explores the coast of Africa
1500-1600 Portugal reaches (and exploits) India, Indonesia, China and Japan
1600-1750 Holland takes over in India, Ceylon and Indonesia
1700-1750 France & England set-up trading posts in India
1750-1900 England sets up an Empire in India and becomes the dominant power
  • All European powers industrialize and scramble for colonies, mainly in Africa, as markets for their goods and sources of raw materials
  • A dozen countries get concessions in China
  • France starts to rival England with the Suez Canal and Indochina.
Nature of Trade
  • Textiles
  • Spices (Black pepper)
  • Tea ( introduced from China by Europeans )
  • Opium ( for export to China )
  • Entrepot for goods from other countries
  • Silk
  • Porcelain (china)
  • Tea
Moluccan Islands Spices: Nutmeg, Cloves and Mace
Java Coffee, Tea
Ceylon Cinnamon & Pearls
Elephants for India
then Tea

Portugal (1400-1600)

The Portuguese were the first explorers. In 1418, Prince Henry – the Navigator – set up a School of Navigation at Sagres, in the south of Portugal, and started systematic exploration of the African coast. The caravel, a ship with a shallow draft and the ability to sail to windward with a combination of square and lateen sails, is said to have been perfected here. Quickly, his captains discovered Madeira and the Azores. In 1443, they reached Mauritania and started trading in slaves. After Prince Henry’s death, explorations continued. By 1470 the Portuguese reached the Equator; the next year they arrived at the Gold Coast (Ghana). After reaching the Cape of Good Hope in 1488, the road to India was now open. In 1498, with the help of a Arab pilot,Vasco de Gama reached India; his round trip took two years.

Since Roman times, traders from various countries had coexisted and their ships were generally unarmed. The Portuguese changed the status quo. From a permanent base south of Calicut they started attacking arab merchant ships. Then a crushing victory over a Muslim Armada in 1509 and the capture of Goa in 1510 gave Portugal a monopoly over trade in the Indian Ocean. In contrast to the approach in the Americas, the Portuguese acted strictly as (monopolistic) merchants; they did not attempt to settle the land.

The Portuguese viceroy Alfonso de Albuquerque then looked further East. His first objective was Malacca, which controlled the narrow strait between Malaya and Sumatra through which most Far Eastern trade moved. Captured in 1511, Malacca became the springboard for further eastward penetration; several years later the first trading posts were established in the Moluccas, or “Spice Islands,” which was the source for some of the world’s most hotly demanded spices. By 1516, the first Portuguese ships had reached Canton on the southern coasts of China and after 40 years, in 1557, they obtained a permanent base at Macau, which they held until 1999. The Portuguese, now based at Goa and Malacca, had established a lucrative maritime empire in the Indian Ocean meant to monopolise the spice trade. They also began a channel of trade with the Japanese, becoming the first recorded Westerners to have visited Japan.

Spices were as valuable as gold in the age of discovery. In the 16th century, over half of Portugal’s state revenue came from West African gold and Indian pepper and other spices; with the profits from spices greatly outweighing the gold. From around 1515, every year 3 to 4 carracks would leave Lisbon for Goa with silver to purchase cotton and spices in India, mainly black pepper. Of these, only one carrack went on to China in order to purchase silk, also in exchange for Portuguese silver. The ships involved were quite large: a returning merchant ship wrecked in sight of Lisbon in 1606 carried 250 tons of pepper and had over 400 people on board.

After the acquisition of Macao in 1557, and the formal recognition as trade partners by the Chinese, the Portuguese had the monopoly of trade with Japan: a single carrack every year, loaded with silk and returning with silver. That trade continued with few interruptions until 1638, when the Dutch took over. The yearly portuguese Black Ship to Japan is featured in the novel Shogun.

Macau would continue to play an important role even after the Portuguese lost their monopoly. It served as an entrepot for 3 lucrative trade routes all using portuguese vessels: 1) Canton-Goa-Lisbon for european trade, 2) Canton-Nagasaki (silver for silk) and eventually 3) Macau-Manila-Mexico. Macau also served as a religious center for spreading Catholicism to China, Japan and southeast Asia. Eventually the Portuguese would lose the Japan trade in 1636 and gradually lose ground to other European powers. But, for 300 years, Macau remained the only chinese base open to all foreign powers. Even when Canton was opened for trade, foreigners would have to return to Macao after the shiping season. This would only change in 1842 after the Opium Wars; but then, nearby HongKong would then replace Macau as the dominant European Base. [Canton & Macao]

Monsoon sailing

Commercial sailing on long distance routes was determined by trade winds and currents in the Atlantic and the seasonal monsoons in the Indian Ocean. These winds blew from the Cape to India in summer and reversed in winter; other patterns applied between India and Japan. Ships would leave Portugal around March, to cross the equator before June and arrive in India between August and October. They would sail south to Madeira then let the trade winds blow them south-west around by Brazil until they reached the westerlies that would sweep them back past the Cape into the Indian Ocean. Homeward-bound vessels would leave Goa or Cochin in late December or January. The voyage from Lisbon to India usually took six to eight months each way.

On the Goa-Japan run, captains would leave Goa in April or May to arrive in Macao in June or August where they would stay as little as a few weeks or as much as a year if they missed the south-west monsoon in the China Sea or the biannual (June & january) silk fair at Canton. Favorable winds to Japan blew in June-August and the trip took 2-4 weeks. In late October or November, the onset of the north-east monsoon permitted the return trip at any time until the following March. Under ideal conditions the Goa-Japan return trip was 6 months. All in all, a sailor leaving Lisbon for a round trip to Japan could be gone anywhere between 18 months to 5 years. [the information here comes from The Portuguese Empire]

Spain (1520 – 1900)

Spain gained an eastern foothold (Philippines) in a roundabout way. While the Portugal went east, Spain had more luck going west. Ferdinand and Isabella backed Columbus, a Genoese captain who had gained most of his experience sailing for Portugal. After 2 months at sea (with a layover in the Canaries) he would reach the Americas in 1492. At first, the Spanish found little in way of riches in the New World; but in 1519, Hernando Cortez conquered the Aztecs and brought to light a treasure trove of gold and silver that would flood into Europe; and, incidentally, allow Europe to purchase luxuries from the more advanced Orient [Silver Trade].

Thereafter, the energies of Spain, would be largely concentrated on the Americas, not on Asia. But the Spanish did sponsor a famous voyage to the East. In 1519, they sent an expedition of 5 ships to find a route around America. The expedition was commanded by Ferdinand Magellan, another Portuguese who had previously traveled to the East for Portugal. He found his way around Cape Horn then sailed in open water for 3 months before reaching the Philippines. Magellan was killed there but one of his ships made its way backto Spain with 18 men, 3 years after leaving.

Forty years later (1565), the Philippines would be colonized and administered for Spain from Mexico. Thereafter, Chinese goods bought with silver from the New World, were transported from the Philippines to Mexico and from there to Spain. By this long route, Spain reaped some of the profits of Far Eastern commerce. The Philippines would a colony until the Spanish-American War in 1898.

1600-1750: the Dutch Golden Age

While the Iberians were exploiting their colonies, protestants in northern Europe were inventing capitalism and their exploration activities would be privately financed via East India Companies (EIC) set up by the English (1600), the Dutch(1602) and the French(1642). Of the three, the Dutch Company (Verenigde Oostindische Compagnie or VOC) had by far the most resources and its (Dutch) monopoly extended from the Cape of Good Hope eastward to the Strait of Magellan. During this time (1605-1665), the Dutch were at war with Spain. The VOC thus targeted the Portuguese who were allied with Spain and within 50 years the Dutch had supplanted the Portuguese in most of present-day Indonesia and in the Malay Peninsula, Ceylon (now Sri Lanka), the Malabar Coast of India, and Japan. The Portuguese managed to keep their base in Macau but the Dutch were able to trade in Canton. See: sailing routes.

The Dutch concentrated on the spice trade. A fleet sailed for the Spice Islands in 1595, and another, put to sea in 1598. Both returned home with rich cargoes of cloves, mace, nutmeg, and black pepper. By 1619, the Dutch had established a base of operations in Batavia (now Jakarta) on Java. The next conquests would be Malacca in 1641, Ceylon in 1658 and the Malabar Coast in 1661.

The Dutch, as other colonials, used brutal methods to maximize their profits from the spice trade. In an effort to limit production of nutmeg to their islands of Banda and Amboina, they systematically destroyed the trees on other islands. When the natives of Banda continued to sell nutmeg to English merchants, the Dutch killed or deported the entire population and replaced them with indentured laborers and when prices for cinnamon or other spices fell too low in Amsterdam, they would burn the crops. At the same time, the Dutch encouraged Chinese immigration in order that they could serve as middlemen in their trade with Indonesians.

In 1624, the Dutch also set up a base of operations in Taiwan – which was not yet settled by the Chinese. Before being ousted in 1662 by a Ming Loyalist fleeing the Manchu, they would bring in 30,000 laborers from the mainland to develop sugarcane plantations. In 1652, they established an outpost on the Cape at the tip of South Africa to restock company ships. They would also explore Autralia. At the peak of its power, in 1669, the Dutch VOC had 40 warships, 150 merchant ships, and 25,000 employess including 10,000 soldiers.

Dutch & Portuguese Posts (1665)

The Dutch also had a privileged relationship with Japan. For two hundred years – after the Portuguese were expelled for missionary activity in 1639 – the Dutch were the only European power allowed to operate in Japan, albeit via a single island: Deshima, off Nagasaki. This contact proved extremely profitable as it allowed the Company to buy cheaply the silver that all European merchants needed silver to buy pepper, textiles in India and silk in China. Because of its ‘Japanese connection‘ the VOC was able to function with limited export of (Mexican) silver from Europe.

Dutch explorers also visited and mapped the western part of Australia starting in 1606, naming it New Holland, but no settlement was attempted.

In its early years, the Dutch were also active in the Americas. Around 1609, Henry Hudson working for the VOC had explored and laid claim to the area around present day New York. Colonisation followed and in 1621, the Dutch purchased Manhattan Island top found New Amsterdam. They continued to be active in the Hudsan Valley area until 1664 when the English overran the colony and New Amsterdam was renamed New York. We include this American footnote because it relates to China through tea. Tea drinking was introduced by the Dutch and became popular in New Amsterdam 50 years before it reached England. After the English takeover, the fashion spread to the other colonies and featured prominently in the Boston Tea Party which sparked the American revolt.

Indonesia: the empire after 1750

After the 1750s, the VOC’s fortunes declined. It went bankrupt and the Dutch government took over its possessions. Then around 1800, revolution in Europe and Napoleon’s wars prompted England to take over administration all Dutch possessions in Asia. Shaortly thereafter, the area now known as Indonesia was returned by the Anglo-Dutch Treaty of 1824 and it became the main focus of Holland’s colonial empire. However, Dutch control in many areas was often tenuous. Under the Cultivation System, much of Java became a Dutch plantation for export crops such as coffee, sugar, indigo and tea; but other areas including Aceh, Lombok, Bali and Borneo remained independent until the 20th century. All the while, Indonesia contributed greatly to Holland’s wealth: just before World War II, it was producing over a third of the world’s rubber, a quarter of its coconut products, and a fifth of its tea, sugar, coffee, and oil as well as most its quinine and pepper.


French Eastern Empire

French colonialism started first in North America with Port Royal(1605) and Quebec (1608) and the West Indies with colonies in Guadeloupe and Martinique in 1635. In Africa, the French established trading posts in Senegal (1624). The French East India Company was established late, in 1664 under Louis XIV, to compete with the British and Dutch East India companies. During the next century, the French would operate mostly in India and the Indian Ocean. Only after 1850, would they get influence further east, in Indochina then in China itself.In 1664, a first expedition went to Madagascar; followed by others to India where factories were set up along the coast – the first in Seurat (1668). In 1674, the company, acquired Pondichéry and transformed it into a flourishing port-town that would serve as the base of French influence. The British station, Fort St. George (then Chennai then Madras) was 80 miles to the north. For a hundred and fifty years these factories remained mere trading stations, taking no part in the general political affairs of the country.

In the beginning of the eighteenth century the Islamic Moghul Empire which had ruled India for 200 years began to decline. From 1700 to 1750, the whole country was ablaze with civil war. The first man to think of exploiting this strife to create an empire was Dupleix, the French Governor at Pondicherry. To that end, he entered into relations with the native princes and built an army of native troops (sepoys).

In 1744, fighting between France and Britain broke out in Europe and spread to India. After the British captured some French Company ships, Dupleix summoned the French fleet based in Mauritius and captured Madras in 1746. Thereafter, by intervening in native politics, intrigue and warfare, he extended his control over a major part of the country. But Louis the XV had little interest in India and showed no appreciation of the successes of Dupleix. In 1754, to make peace in Europe, the French sent orders to replace Dupleix – whom they considered a dangerous adventurer – and, if necessary, to arrest him. Dupleix would live out the rest of his years in disgrace.

Shortly thereafter, defeat by the British under the command of Robert Clive marked the end of the French stake in India. [Wikipedia]. This was officialized by the Treaty of Paris of 1763 which also stripped France of Canada. By 1815 the French Empire was reduced to Martinique and Guadeloupe, St Pierre and Miquelon, trading posts in Senegal and five posts in India and Réunion.

French India (1741-1754)

Click for large map

For the next 100 years, the French were kept busy closer to home: first with the Revolution then with the campaigns of Napoleon. Activity in the Far East would resume under Napoleon III. In 1858, he used the mistreatment of French missionaries in Vietnam as a pretext to launch a naval expedition (Wikipedia) which involved 14 gunships and 3,000 men. This eventually led to a full-out invasion. By 1862 the war was over and Vietnam conceded three provinces in the south. In the next few years, the French extended their influence fighting both the Vietnamese and their Chinese allies. They took part in the Second Opium War(1856-1860) fighting with the United Kingdom against China and, in 1860 French troops entered Beijing. China was forced to concede more trading rights, allow freedom of navigation on the Yangtze, give full civil rights to foreigners, and give France and Britain a huge indemnity. A few years later, after a victory in the Sino-French war (1884-1885), the French created Indochina from Annam, Tonkin, Cochinchina (present day Vietnam) and the Kingdom of Cambodia. Laos was added in 1893 after a conflict with Siam.

Expansion of French Indochina

Also indicative of French Colonial ambitions was the the construction of the Suez Canal between the Red Sea and the Mediterranean. The 192 km canal was built with French capital along the route of older disaffected canals. In spite of vigourous opposition from England, the canal became operational in 1869. The canal has no locks but there is perpetual flow from the Red Sea to the Mediterranean which is 1.2 m lower.

European colonies in 1689

British Empire

Fort George (1639)
Later Madras
The English started their foreign activities at about the same time as the Dutch. Queen Elizabeth I (1533 – 1603) had made the navy a priority. At first, her privateers raided Spanish galleons returning from the Americas. Then she sponsored Francis Drake to sail around the world. Leaving in 1577, Drake passed through the Straits of Magellan to the Pacific where he raided settlements and captured a treasure ship. Continuing, he traded for spices in the Moluccas and returned to England in 1580 with treasure that exceeded the crown’s income for that year. More important, in 1588, Elizabeth’s navy defeated the Spanish Armada.

After making peace with Spain (1604), England started establishing colonies in North America, like Jamestown in 1607, and plantations on Carribean islands. These plantations for tobacco and sugarcane required cheap labor and England started importing slaves from Africa in 1672. By 1680, the annual rate of slave deportation had reached over 70,000 each year [slave trade]. The situation in the Americas remained relatively stable for the next 100 until England gained Canada in 1759 and lost the American colonies 20 years later (1779).

In the East, their East India Company had more limited success: they were no match for the Dutch in Indonesia but they gained a foothold in India with trading posts at Surat (1612) and Madras, now Chennai (1639). The rivalry between the British and the Dutch ceased after 1688 when the Dutch William of Orange ascended the English throne. A deal between the two nations left the spice trade of the Indonesian archipelago to the Netherlands and the textile industry of India to England and in 1690 the company set up a new factory in Bengal on a site that would become Calcutta. Unfortunately for the Dutch, textiles would soon overtake spices, and by 1720, the English company made more profits than the Dutch. The 18th century would see England rise to be the world’s dominant colonial power with France as its main rival.

In India, after the death of its emperor in 1707, the Mughal Empire, which had rule for 200 years, entered a period of instability. During this time, both the English and the French Companies vied for supremacy and started intervening in the conflicts between the various principalities. At first, the French under Dupleix had the upper hand but support from Paris was denied and the British under Clive defeated their Indian and French rivals at the Battle of Plassey (1757) and established the English East India Company as the dominant power in India. By the early 1800s, most of India was under the control of the East India Company. In 1858, native resentment came to a head with the Sepoy rebellion which was put down with great difficulty. Thereafter, the British Crown took over administration of India, in tandem with local elements. Initially, Calcutta was the capital and India’s boundaries were gradually expanded to include what are now the independent countries of Pakistan, Bangladesh, Myanmar (formerly known as Burma), and Sri Lanka (Ceylon).
British India (1858)
Larger Map
Historial Maps

Australia was added to the Empire by James Cook in 1770. Although New Holland, as it was first called, had been discovered by the Dutch in 1606 and visited by over 50 of their ships, no trade or settlement had been attempted. English colonisation started in 1790.

The next changes in the empire followed the Napoleonic wars (1799-1815). Holland had been conquered and thus allied with France against England. This prompted Britain to seize Dutch possessions, including the Cape Colony, in South Africa; Ceylon (later Sri Lanka), Malacca in Malaya and Java in Indonesia. In 1819, the British governor of the region Thomas Raffles obtained the rights to the island of Singapore and established a settlement which quickly grew into a major trading port – eclipsing Malacca. Eventually, in 1824, the British and Dutch signed a treaty divided the region between them. The British got Malaysia and the Dutch were given what is now Indonesia.

During the 19th century, Europe was in turmoil as nations coalesced and industrialized states emerged. By 1848, the US had grown accross the continent to the Pacific; by 1871, Germany and Italy had been formed; and elsewhere Turkey, Russia and Japan started exerting their influence. Then the race would start for colonies as sources of raw materials and markets for finished goods. Most competition would occur in Africa which would be rapidly divided. In Asia, the industrialized nations would try to penetrate into China.

Opium Wars

Starting in 1700, English clippers began calling at Canton almost every year. They would purchase silk, ceramics and tea

References: White History

Imperial Japan

Beginning in the late 19th century, Japan fought a series of wars that expanded its control over the Asian mainland. By the beginning of World War II in 1939, Japan had a sizeable empire in East Asia. On December 7, 1941 Japan made a major military push into Southeast Asia and the Pacific, simultaneously launching an attack against the United States. The Japanese empire reached its height shortly thereafter, in 1942. After that, Allied military forces began to push the Japanese back toward their home islands. Japan lost all of its colonial territories after its defeat in World War II.


Prior to the 19th century, China considered European nations as barbarian unfit for diplomatic recognition as equals. Trade goods were viewed as a form of tribute and allowed entry in a limited number of ports. Traders had no diplomatic standing and could be imprisoned or executed without recourse. After the defeat of China in the opium wars, Europeans obtained concessions, districts in port cities where European administration and law applied. The British and the French were the first to obtain concessions. Major powers like Japan, Germany, Russia and the US as well as minor players like Italy, Belgium and Austria-Hungary also had concessions. Shanghai was the largest concession port with French, British and American settlements created around 1850. Tientsin (Tianjin) gateway to Beijing had British and French areas from 1860. The Japanese concession was established in 1888 with most others around 1899-1902 Tsingtao (Qingdao) ceded to Germany in 1897 Taiwan was a Japanese colony from 1895 to 1945.

1400 – 1500 Portugal Africa
1500 – 1600 Portugal Far East: India, Indonesia, China & Japan
Spain Central & South America
Philippines (1650-…)
1600 – 1700 Dutch Far East: gradual take-over from Portuguese
in Indonesia, Malaya, India & Ceylon
China: trade established
Establish competing trading posts on east coast of India
Establish competing colonies in North America
1700 – 1800 England India: gets the upper hand (1750)
1800 – 1900
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