The flow of silver from the mid-sixteenth century to the early eighteenth century led to social and economic changes in Europe and China. In China, the standard of living increased, common people became poor, and a form of currency was developed, along with this came the Chinese becoming more ethnocentric due to large amounts of silver flowing in. In Europe. they became middlemen for Japan and China, but made little to no profit due to their demand for Asian luxuries which led to imbalance in trade. European scholars were very aware of the imbalance of the trade between Europe and China.
In China, socially, the standard of living increased. For example, people began spending a great of money on weddings and such, and orders were sent out to limit the amounts spent on weddings in the 1570s. People desired more, no amount was enough (Doc 1). Most of the changes were economic changes however. Chinese citizens began to face poverty. A court official, which was very odd to his opinion being very unpopular with the government (POV), reported that citizens were receiving very little work for their labor due to the prices of grain falling. Also, it was said that although the government was demanding silver for taxes, they were distributing very little to citizens (Doc. 3) A form of currency was also being developed, dye shops began only accepting silver on spot, rather than being able to barter for other goods such as rice and wheat. This also led to a banking system because citizens needed a place to keep their silver, which also meant banking jobs.
However, it slowed down the internal economy because customers had to pay on spot, where rather than being charged on a tab and finishing the trade right then and there, they had to go and get money from a bank, come back then pay (Doc 5). The Chinese were also becoming more ethnocentric. The large amount of silver flowing to them because of many nations buying all their goods caused this. They’d export goods such as yarn which cost about 100 bars of silver, but instead charged 200-300 bars of silver in areas such as the Philippines. They knew many places desired their luxury goods (Doc 7).
In Europe, and imbalance in trade was going on between them and China.
Countries such as Spain were paying high prices for luxury goods, and sending out practically all their silver to China (Doc 2). Europe became the middleman for China and Japan. They would go to China and bring back goods such as silk, gold and perfume, and then bring it to Japan where they’d trade it for even more silver than it was worth, and then go back to China and purchase more goods in which they took home (Doc 4). Europe was only interested in luxury goods, rather than necessities. They would give all their silver to China in exchange for luxuries, and then China would bury all the silver and it would never return. However, Europe would never leave this trade, because citizens now had a desire for all the silks and dyed clothes.
This however, put Europe in control of the Indian Ocean because that’s where they’d do a majority of their trading (Doc 8.) Socially, men who mined silver tended to be the poorest and received no share in this great amount of silver. A priest, who was all about the people rather than the government (POV) realized how brutal Indians were worked due to the demands of silver from the mother country of their colony.
European scholars were very aware of how all the silver was going to China. Spanish scholar, Tomas de Mercado, who is most likely a very reliable source to due his smarts being a scholar and his awareness of what was actually going on (POV). He noticed Spain being ruined and becoming broke to their high amount of imports of luxurious goods. English scholar, Charles D’Avenant, who could also be a very reliable source being a scholar and also writing an essay on East Indian trade which meant having knowledge on trade, realized how bad all the importing of goods was hurting England (POV) . He was aware everything being imported was not of use to their nation, but only for luxurious needs. D’Avenant knew people began to desire all this, and it almost became necessary for the people to have all these goods such as silk. He advised this trade shouldn’t be quit because it kept the Europeans in control of trade in the Indian Ocean.
All this silver led to some good and some not so good changes in China and Europe. It seemed both areas, the desire for luxuries raised. China was getting all the silver making authority officials rich, and common people poor. While in Europe, people were treating themselves with luxuries, while the government was losing money. The flow of silver led to jobs and a form of currency which was an advancement for China. However, for Indians, this meant extracting all this silver. And for Europeans it meant a drain in their economy from a large amount of high priced imports, and low exports.