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Foreign Moguls and Maligned Merchants

In ancient China, ethnic minorities dominated foreign commerce, while restrictive policies and conservative views often prevented the Han majority from joining the fray

By Song Yimin Updated Feb.1

Tri-colored glaze pottery figures of ethnic minority merchants and a camel dating from the year 723 during the Tang Dynasty, exhibited in the Palace Museum, Beijing

According to the General Administration of Customs of China, the private sector in China posted a 28 percent year-on-year growth in foreign trade in the first 10 months of 2021, generating 48.3 percent of China’s total imports and exports. Its growth rate and share both outperformed those of foreign-funded enterprises and Stateowned enterprises. In 2019, China’s private companies contributed more to foreign trade than foreign-funded businesses for the first time. From 2000 to 2018, more than 49 percent of China’s foreign trade derived from foreign-funded businesses in China, according to China’s Ministry of Commerce.  

In ancient China, Han businesspeople faced discrimination, and merchants from ethnic minorities and other regions not only were successful in business, but sometimes wielded political power. This was particularly true in foreign trade.  

Sogdian Merchants 
“Young men from Wuling were at the golden market, and they laughed and went into a pub with foreign hostesses.” These are lines from a poem written in the 8th century by Tang poet Li Bai, arguably the most famous poet of ancient China. Wuling was in the suburbs of today’s Xianyang, Shaanxi Province, which was the former capital of the short-lived Qin Dynasty (221-206 BCE).  

During the subsequent Western Han Dynasty in the late 3rd century BCE, many senior officials and dignitaries lived in Wuling. “Young men from Wuling” refers to young men born of rich, noble families during that time. In Tang poems, the term was also an allusion to guards of the imperial court. They were described as rich, chivalrous and unrestrained, much like the knights of medieval Europe.  

The “golden market” from Li Bai’s poem referred to the bustling Western market in the Tang Dynasty (618-907) capital of Chang’an, now called Xi’an – downtown Chang’an was located only kilometers from Wuling. The Western market was the center for goods exchanged on the Silk Road, brought to the city on camel trains. The other major Chang’an market was the Eastern market, which sold high-end consumer goods. Both markets were open only in the afternoon. 

In recent years, archaeologists have discovered Tang figurines and pottery bearing depictions of non-Han merchants leading camel trains. They were major players in domestic markets and foreign trade during the Tang Dynasty.  

Most merchants at Chang’an’s two markets were Sogdians. For more than 1,000 years since the 1st century, Sogdians lived in Central Asian areas to the east of the Iranian Plateau, mainly in present-day Uzbekistan, Tajikistan and Afghanistan. In Chinese historical records, they are referred as to the “nine surnames of Zhaowu.” Zhaowu was an ancient city in today’s Gansu Province from where Chinese historians believed the Sogdians originated. Sogdian surnames, such as Shi, An, Kang and Cao are common among Chinese people today.  

Sogdians were very successful in business. They pursued commercial interests under the aegis of the strong and prosperous Han and Tang dynasties, as well as in the neighboring Turkic kingdoms. A rich Sogdian businessman could run a caravan employing thousands of people. Their families built wellconnected networks along the Silk Road to help secure their passage. Many often spoke several languages.  

In recent years, Sogdian tombs were discovered in Shaanxi and Henan provinces. In 2000, the tomb of An Jia, a wealthy Sogdian businessman, was unearthed in Xi’an. An Jia died at 62 in the year 579, when China’s north was controlled by the Northern Zhou (557-581), a kingdom ruled by the Xianbei. The Northern Zhou government made him chief of the settlement where he and other ethnic minorities and foreigners lived. Near the tombs, remains of houses of worship for Middle Eastern religions were found, such as Manichaeism and Zoroastrianism, as well as synagogues.  

Ethnic minority businesspeople, mainly Sogdians, used merchandise from the Silk Road as collateral to borrow money within their family networks. It was an early form of credit, a financial tool that facilitated their expanding trade.  

Imperial records from the 11th century described Sogdians as “willing to go anywhere for business.” As Sogdians were thought to prioritize commerce above family connections and have no political ambitions, rulers of the Sui and Tang dynasties and neighboring Turkic kingdoms deemed the group safe to hold office. Some Sogdians were appointed as senior officials.  

By contrast, Han businesspeople were restricted. While the throne monopolized salt and steel, ethnic minority dealers controlled other profitable trade in goods like silk and gems along the Silk Road. Han businesspeople did not have access to credit like their Sogdian peers.  

The policy of leaving trade to ethnic minorities aimed at encouraging domestic agricultural production in China’s imperial dynasties.  

But the Tang was nearly taken down by two Sogdians with strong political ambitions. In the early 8th century, An Lushan was born to a Turkic mother. She remarried a Sogdian general a few years later, and the family lived in a Sogdian settlement in today’s Liaoning Province in China’s northeast. His childhood friend Shi Siming was also Sogdian. An could speak Chinese and nine other languages, and the two men served as interpreters and mediators for the Tang border customs office. During that time, the Tang established nine military theaters along its border area. Generals leading the theaters gradually expanded their power to control both political and military affairs under their jurisdictions. An became the most powerful among them, as he headed three theaters. Shi Siming also became a senior military officer for the Tang. They were both deeply trusted by Tang Emperor Xuanzong. But in 755, An and Shi led a rebellion lasting eight years that severely weakened the Tang. Sogdian influence on the imperial court declined after the dynasty quashed the rebellion.  

A stone platform bed, tomb of An Jia, Northern Zhou period (557-581), Shaanxi History Museum, Xi’an, Shaanxi Province

Han Business 
China’s market economy and cultural development peaked during the Song Dynasty (960-1279). The Song included the Northern Song (960-1127) based in today’s Henan Province and the Southern Song (1127-1279) mainly ruling the area south of the Yangtze River. A very famous painting titled “Along the River during the Qingming Festival” by early 12th century artist Zhang Zeduan captures bustling market scenes in the capital Kaifeng during the last years of the Northern Song. Part of the Song’s prosperity is attributed to relaxed restrictions on business. Unlike the Tang, there were no walls or gates between residential communities, and curfews were lifted. These changes made interaction much easier. In the painting, there are shops and inns along the river and peddlers touting their wares. The 2018 period TV drama Minglan centers on a fictional love story set in the Northern Song that highlights the era’s nightlife. The heroine, Sheng Minglan, loves food. When she was unhappy, her husband would cheer her up by buying her favorite snacks or taking her out to dinner.  

However, the Song was a far cry from a free market economy. The throne not only held monopolies over salt and steel but also expanded them to other daily commodities, including tea, alcohol and alum.  

In the painting, a foreign merchant’s caravan is entering the capital. Unlike the Han and Tang, the Northern Song was not strong enough to keep the Silk Road safe, as it passed through two neighboring empires, the Western Xia (1038-1227) and Liao (916-1125). However, as the painting reveals, caravans from the West and Central Asia still played a major role in Song foreign trade. As a result, imperial-owned, private and foreign businesses were all important to the Northern Song market economy, where foreign merchants were the key players in foreign trade.  

After the Northern Song was destroyed in 1127 by the Jin Dynasty (226-420), which was ruled by the Jurchens of the northern steppes, Gaozong, a brother of the Northern Song’s last emperor, Qinzong, founded a new dynasty south of the Yangtze River – the Southern Song. The region was the most prosperous in China at that time, economically, culturally and technologically. There were two important technological breakthroughs made during the Southern Song. One was the spread of movable type printing, and private printing houses quickly popped up to cater to a burgeoning market for print media. The other was the improvement of the compass for maritime navigation, making long-distance oceanic voyages possible. Compared with the Silk Road land routes, sea routes not only reached more cities, but made shipping more cost effective. They eventually replaced the Silk Road to make the Southern Song the world’s largest trade economy.  

But independent Han private merchants were still sidelined in foreign trade during the Southern Song.  

The port cities of Quanzhou in Fujian Province and Alexandria in Egypt were the largest in the world during the Southern Song. In July 2021, Quanzhou was included on the UNESCO World Heritage List as the starting point of the Maritime Silk Road. According to UNESCO, Quanzhou’s cultural sites “reflect in an exceptional manner the spatial structure that combined production, transportation and marketing and the key institutional, social and cultural factors that contributed to the spectacular rise and prosperity of Quanzhou as a maritime hub of the East and Southeast Asia trade network during the 10th-14th centuries.”  

Two major players dominated foreign trade in Quanzhou during the Southern Song. One was the Pu family from the Middle East, and the other was the Song royal family.  

Han-owned businesses were still excluded from foreign trade, a policy reinforced by neo-Confucianism. The school of thought, which became mainstream during the Southern Song, held conservative views on society and ethics. It was during this era that women’s foot-binding became widespread, and farmers still had a higher social status than businesspeople.  

In addition, maritime trade cost a lot of money, and smaller Han-run businesses did not have the capital to invest.  

During the Mongol-controlled Yuan Dynasty (1271-1368), business lost its stigma. But Han businesspeople, along with all other Han, were seen as inferior to the ruling Mongols, foreigners and other ethnic minorities of the dynasty.  

After the Yuan, foreign trade was banned or highly restricted during the Ming and Qing dynasties (1368-1911). But in the late Ming of the 16th century, Han businesspeople enjoyed higher social status. Since the Southern Song, China’s economic and cultural centers shifted south, especially to the Yangtze River Delta, which today remains one of the most powerful engines of China’s economy. The area’s market economy boomed in the 16th century. Private businesses engaged in textiles, shipbuilding, oil extraction and other sectors. Even scholars who failed the imperial exam sought to join the business world. This was inconceivable before the 16th century, when poor scholars were much more revered than rich merchants.  

Despite the improved social status of businesspeople, agriculture was still the top priority for the Ming and Qing dynasties, and passing the imperial exam was still a much better choice for scholars than business. When foreign trade was highly restricted and commerce was not respected, China’s market economy developed slowly.  

However, during this time, the market economy was booming in the West, which would set the stage for the coming Age of Exploration and Industrial Revolution. 

People stand above the excavation site of the Nanhai One, a merchant vessel built during the Song Dynasty (960-1279), Taishan, Guangdong Province, May 23, 2014