Economic/Business

The period between the mid-1830s and early 1920s witnessed the migration of some 3.7 million Africans, Chinese, Indians, Japanese, Melanesians, and other peoples throughout and beyond the colonial plantation world to work as laborers under long-term written and short-term oral contacts. Studies of this global labor migration over the last forty years have been heavily influenced by Hugh Tinker’s 1974 argument that the indentured labor system was essentially “a new system of slavery.” There has also been a propensity toward specialized and compartmentalized studies of the indentured experience in various parts of Africa, the Caribbean, the southwestern Indian Ocean, India, Southeast Asia, and Australasia, with a particular emphasis on systems of labor control and worker resistance. Recent scholarship reveals that this labor system began two decades earlier than previously believed, and illustrates the need to explore new topics and issues in more fully developed local, regional, and global contexts.

East Asian monetary systems were traditionally based on commodity monies, the most famous of which were round copper coins (Cash) with a square central hole, and silver ingots (Tael, from around 1000 ce). While issue of the former was in the hand of the state, silver bars were privately produced and controlled. The Tael nonetheless served as a unit of account also in government ledgers. China was the first nation worldwide to use paper money backed by bullion reserve (c. 1000–1500), but fiat monies were not readily accepted by markets. Gold coins were exclusively used in Japan from circa 1600. With the discovery of Mexican silver, China and Japan became part of the silver-based world economy. Japan adopted the Gold Standard in 1897 and gained access to the world’s financial markets, while China’s currency landscape, even after modernization, remained fragmented and decentralized. With a favorable exchange rate against the US$, Japan recovered after World War II. The US$ devaluation in the Plaza Accord 1985 did not stop that boom. Excessive loans induced the asset price bubble of 1987. In the “lost decade” until 2000, the Bank of Japan pursued a volatile monetary policy, so in 1998 it was necessary to induce liberalization of the banking sector. Reform in the financial sector was also begun in South Korea after the Asian Crisis of 1997. The Chinese policy of Reform and Opening in 1978 first led to inflation and then to undervaluation of the Renminbi (Yuan), which supported the unique economic growth. The currency was made convertible in 1996 and was in 2005 pegged to a basket of foreign currencies. China’s banking system remains underdeveloped and suffers from the burden of indebted state-owned enterprises. China has accumulated huge amounts of foreign exchange. The RMB might become an anchor currency of a financial regionalism.

The origin of British India can be traced to warfare in 18th-century Europe and India, trade-related conflicts and disputes, and the East India Company’s business model. The state that emerged from these roots survived by reforming the institutions of capitalism, military strategy, and political strategy. As the 19th century unfolded and its power became paramount, the Company evolved from a trading firm to a protector of trade. The rapid growth of the three port cities where Indo-European trade and naval power was concentrated exemplifies that commitment. But beyond maintaining an army and protecting trade routes, the state remained limited in its reach.

The Parsi community enjoyed a special status in western India as enterprising traders, who were quick to appreciate the advantages of the British connection especially in driving a huge trade in the Indian Ocean and specifically with China from roughly the latter half of the 18th century. Arriving in India as asylum seekers, the community quickly adapted to the host society by adopting the local language (Gujarati) and by deploying their commercial and manufacturing skills in consolidating their social location in the region. They were mindful of the ruling powers and developed over time important strategies of working closely with local interests, so much so that they acquired a foothold in landed and commercial society. It was in the late 17th and 18th centuries that they forged important links with European traders and trading companies, working as brokers for procurement of textiles and in the process acquiring a very close understanding of foreign markets. This was an important resource that enabled the community to play a major role on the emerging proto-colonial trade of western India, largely channeled through Bombay. The late 18th and 19th centuries saw the community produce major players and merchants of renown who amassed considerable wealth from the trade in raw cotton and opium with China and invested that wealth in philanthropy and subsequently in entrepreneurship. The community was primarily located in Bombay and western India, although their ventures took them as far as Calcutta and Canton. More recently there has been a considerable volume of scholarship on the community, emphasizing its origins, its histories and self-representation, and its use of the English colonial law in defining its own status and streamlining its customs.

Southeast Asian polities were destined to play an active role in the world economy because of their location at the crossroads of East Asian maritime routes and their richness in commodities that were in demand in the whole of Eurasia. For a long time, historians restricted their role to examination of regional peddling trade carried out in small ships. Research on ships and trade networks in the past few decades, however, has returned considerable agency to local societies, particularly to Austronesian speakers of insular Southeast Asia, from proto-historic to early modern times. As far in the past as two thousand years ago, following locally developed shipbuilding technologies and navigational practices, they built large and sophisticated ships that plied South China Sea and Indian Ocean routes, as documented by 1st-millennium Chinese and later Portuguese sources and now confirmed by nautical archaeology. Textual sources also confirm that local shipmasters played a prominent part in locally and internationally run trade networks, which firmly places their operations into the mainstream of Asian global maritime history.

This is an advance summary of a forthcoming article in the Oxford Research Encyclopedia of Asian History. Please check back later for the full article.

Colonial Indonesia’s sugar industry, developed under Dutch and Sino-Indonesian auspices over a period of almost three centuries, beginning c.1650, evolved into a unique configuration, in which an industrialized sugar complex became embedded within a much larger peasant economy farming rice and “second” crops. It was on this agrarian basis and largely self-financed that Indonesia’s colonial sugar industry, located exclusively in the island of Java, became one of the leading sectors of the international sugar economy of the late colonial era, eventually rivaling even Cuba—the nonpareil of such producers—as an exporter to world markets. During the Inter-War Depression of the 1930s and the subsequent decade of war and revolution, the sugar industry lost much (and eventually all) of its international standing—yet it managed to survive into Indonesia’s post-colonial era, albeit in an attenuated form.

In 1684, China reopened its doors to trade with the outside world, which had a huge impact on the development of global commerce. Canton quickly emerged as one of the few ports in the world where everyone was welcomed and where everyone (except Japanese and Russians) had access to everything including tea, silk, and porcelain. Unlike other ports, individual traders in Canton could buy and sell the same high-quality products as those handled by the East India companies. As the Canton trade grew, international networks became more sophisticated; as more ships went to China, new forms of remittance such as Letters of Credit and Bills of Exchange became standard, which streamlined international finance; as more money flowed into Canton, more goods were distributed worldwide, which gave rise to globalization; as economies in both the eastern and western hemispheres became more integrated with the Chinese market, there was a parallel decline in the risks of conducting trade, which encouraged the advancement of private enterprise. One by one the large East India companies found it increasingly more difficult to compete and went broke.

However, the success of the Canton trade was also its weakness. Because the legal trade was so dependent on silver collected from opium sales, and because a decline in opium sales would likely lead to a decline in rice imports, only minimal efforts were made by local officials to stop the smuggling. Foreigners were eventually able to overcome the system with the outbreak of war in the late 1830s, but this happened because the system had already defeated itself.