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Return to the Archive | BerkshireWorldHistory.com 6 January 2006 Volume 2, Issue 7 Lately, we’ve been thinking a lot about the concept of guanxi, a Chinese term generally translated as “networks” or “connections.” Most guanxi relationships are based on individuals’ having something in common—coming from the same village or region, graduating from the same school, or working in the same industry.
Guanxi is also the name of Berkshire Publishing’s newest venture—a monthly newsletter that will offers insights into Chinese culture and history alongside sophisticated political and economic analysis. China and the United States have much to learn from one another, especially in terms of business development. In the spirit of promoting guanxi, this issue of World History to Go focuses on patterns of commerce and trade associated with the two nations. Early U.S.–China Trading Ties
The Spread of Tea
Tea began to be imported to Europe in the seventeenth century. When the direct clipper trade to China opened up in the 1720s, the price dropped and the imports soared. By the middle of the eighteenth century it was widely drunk by all classes in Britain. It was exported to the colonies, and the duty imposed on tea contributed to colonial unrest (as demonstrated in the Boston Tea Party of 1773, in which angry colonists dumped shipments of tea into Boston Harbor), which culminated in the American Revolution and the establishment of the United States. [From the article, “Tea,” in the Berkshire Encyclopedia of World History.] Inside the Berkshire Encyclopedia:
For more on commerce and trading try articles like International Monetary Systems, Multinational Corporations, Silk Roads, Spice Trade, Trade Cycles, Trading Patterns - Ancient American, and Trading Patterns - China Seas. CapitalismAlthough trade of goods and services is central in world history, capitalism is a relatively recent world phenomenon. Global trade, surplus production, and global consumerism helped spawn the global capitalism that dominates trade and international politics today. Capitalism, in turn, changed the distribution of power in world history. Today most regional markets are tied to global markets. Surplus production is the goal of most state economies, and mediums of exchange like the European Union euro, the U.S. dollar, and the Japanese yen provide more individual economic choice around the globe than ever before. The experiences and lives of billions of people are changing in significant ways because of the economic model of capitalism. [. . .] Capitalism has proven to be a major shaper of world history and individual experience with its emphasis on freer markets, surplus, and a blend of state and private economic control. However, the influence of capitalism in world history has also been limited by factors such as scarce resources and local trade beliefs. Such factors have highlighted regional economic differences and have shifted the international balance of power in new directions. The struggles and successes of a growing European Union, China’s capitalistic cities, and the North American Free Trade Agreement are three examples. Still the economic success stories of Japan and Ireland do suggest possible future avenues of growth for capitalism. [From the article, “Capitalism,” in the Berkshire Encyclopedia of World History.] 
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With all good wishes for the New Year just beginning. And may we also wish you xin nian kuai le! [pronounced sheen nee-an quwhy lee] (Happy New Year!) in celebration of the Lunar New Year beginning on January 29. With warm regards, |
Wide webs of guanxi tie Chinese businesspeople and Chinese firms into a cohesive and functioning economy. Western business experts have been intrigued by these ties—both as a model for building networks and for understanding Chinese society (which is now essential to Western commerce and trading in the twenty-first century). 
Since the early days of the Sino-Western trade in Guangzhou (Canton), China, Chinese merchants who were licensed by ruling Qing dynasty (1644–1912) to trade with foreign merchants were known as hong merchants. The term came from the name of the trading guild, Cohong, established in 1720, to which they all belonged. As their number was highly restricted to about a dozen or less at any one time, and as the trade volume grew to very substantial size by around 1775, many hong merchants became some of the most prominent and wealthy merchants in China. During the early nineteenth century, the most powerful hong merchant was Houqua (d. 1843). The full extent of his wealth is not known, for besides running extensive business enterprises in China, Houqua also formed joint ventures and partnerships with Russell & Company, a U.S. firm that did business in China. He consigned specific shipments of goods to it for sale overseas without the knowledge of the Chinese State. He also invested directly in the United States, including in stocks in the transcontinental railroad. From what can be gleaned from various accounts, Houqua appears to have been worth several million U.S. dollars, and thus may well have been the richest man in the world at that time. [From the article, “Hong Merchants,” in the 
Tea moved from the jungles of the golden triangle into the monastic gardens of China at least a thousand years before the birth of Christ. It spread across all of China by the eighth century CE. From the ninth century onwards it became the chief commodity traded with the wandering tribes of central Asia. The Mongols and Tibetans became great tea drinkers, and blocks of tea became the local currency. Tea was drunk by Buddhist monks as a medicinal beverage in Japan from the eighth century; in the thirteenth century the habit of drinking tea spread to the rest of the population, and tea became the universal drink.
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