How silver changed the world – by Adolfo Arranz and Marco Hernandez (South China Morning Post – May 27, 2018)

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The main objective behind the sea route plied by Spanish galleons was to establish trade with China. These European vessels became known as China Ships. They transported silver from the Americas to exchange for goods in Asia, mostly commodities of Chinese origin

It can be argued that when Spain instituted a common currency in the form of the Real de a Ocho, also known as Pieces of Eight, or the Spanish dollar, globalisation’s first chapter had been written. The acceptance of the dollar coins for commercial transactions throughout Asia, the Americas and much of Europe, resulted in a cultural exchange between nations, as well as the relatively free movement of people and goods between the three continents.

China had an appetite for silver …

When the Spanish tried to establish commercial ties with China they found little taste for goods from the outside world. However, it transpired the Chinese had a voracious appetite for silver. In fact, during the latter part of the 16th century, during the Ming Dynasty, Beijing ruled taxes should be paid in silver, and without domestic recourse to the precious metal, the demand for imported silver soared.

Spain’s colonies in the Americas could mine enormous quantities of silver and the Spanish began to export the commodity to China via their Manila connection.

The colonial mine was located in the Bolivian city, Potosí, for several centuries. At an altitude of 4,000m, Potosí lies at the foot of the Cerro de Potosi, a mountain popularly conceived as being made of silver ore. China’s insatiable demand for silver led to increased production in the Bolivian highlands and by the late 16th century Cerro de Potosi alone produced an estimated 60 per cent of all silver mined in the world

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