Trade networks in Southeast Asia


There is a common perception that a region hardly develops unless foreigners step in. For Southeast Asia, this assertion holds some truth looking at this region from a historical point of view. Currently this region has some of the fastest growing economies such as Singapore and Malaysia. For ages the region had generally been termed as underdeveloped however currently the level of development in this region can match some of the European powers. The ancient Southeast Asia was almost lost to the world in as far as trade was concerned until the Chinese set foot in the region. Notably, the Chinese merchant's established trade networks for Southeast Asia to other regions such as India and West Asia. Additionally, it was not until the arrival of the Chinese ships that trading states like Srivijaya and Malacca emerged. In the 16th century, the European moved to Southeast Asia for trading purposes though with different intentions[1]. Ancient trade can be credited for the development of some of the biggest cities currently inexistence and this is no different for south East Asia region. Therefore, this paper will concisely document the role played by the Chinese merchants and the European in enabling trading networks for Southeast Asia. Further the paper will briefly highlight the lasting impact of the ancient trade in south East Asia

Role of Chinese merchants

The history of the involvement of the Chinese merchants in the southeastern trade goes back many centuries. The trade between China and Southeast Asia started long before the Europeans participation in the region in the 16th century, and at this time, the trade was referred to as Nanhai trade. [2] The Chinese merchants engaged in a lucrative business, which saw the rulers of Southeast Asia plunge into conflict. The tussle was for dominance and wealth in the Malay Archipelago. The Chinese merchants played a significant role in the trade networks of Southeast Asia even though their involvement yielded a certain degree of conflict as well. The Nanhai trade was a maritime trade involving the kingdoms of Southeast Asia and China, which encompassed the markets between the tip of Malay Peninsula and Annam. The Chinese maritime trade entailed exploration with the intention to expand the trade networks. In this quest, the Chinese merchants realized possible direct trade with Arab, Rome, and India. Southeast Asia was strategically located to act as the facilitator of this trade.[3]

Malay Archipelago was found to be a hindrance to the new trade networks to the west, prompting the Chinese sailors to seek alternative routes across Malay Peninsula and Kra Ithmus. Opting to cut across peninsula was not only prompted by the hindrance caused by Malay but was also motivated by the availability of indigenous products in Southeast Asia’s mainland. These products were considered to be of great value and would hence make Chinese trade to the west very lucrative. The Nanhai trade resulted in the emergence of Malay maritime kingdoms. These kingdoms were supported by entrepot trade which linked the merchants from the East and West to India, West Asia, and China. Notably, this trade expanded the trade networks for Southeast Asia even though the discovery was made by the Chinese merchants.

The first Malay maritime empire to emerge as a result of the Nanhai trade was Srivijaya. This empire enjoyed strategic positioning between two key water channels namely the Sunda and Malacca Straits. This empire flourished between the seventh and eleventh centuries enjoying dominance over neighboring ports. Srivijaya Empire indulged in a trade to China, and as logic would have it, the traders engaged by the empire on the trade missions were merchant leaders from China. The rationale behind this was that the establishment of this empire would not have happened without the resilience of the Chinese merchants. Additionally, the Chinese merchants were well versed with the market dynamics in China. The Srivijaya Empire dominated for a long time by it escaped the Archipelago history in the 11th century.[4] However, the downfall of this empire was not sudden. Instead, the decline of its dominance started after the empire was attacked by a kingdom in south India called Cola. It was more than four centuries later that an empire as strong as Srivijaya rose in Malay. Nonetheless, Malacca had not only caught the attention of the Chinese only.

Malacca was considered to be much more than what people would consider to be a tollgate. This is because it was an active trading city state. Its influence was felt throughout the region and as a result it became to be seen as central to the vast intra island network trading network. All the wealth of this region was concentrated and directed to this region. For instance there were teak ships and rice from Burma, tin and pepper from Malayan peninsula, cloves and nutmeg from the moloccas.  However, Malacca’s power both from a political and commercial perspective became weakened upon the arrival of the Portuguese who were the first Europeans to explore the region. The Portuguese used their force and by 1511 they had captured the town. This marked the beginning of the long sultanate decline[5]. By the 16th century, more European powers moved in to catch a piece of the action. It is important to note that despite the decline of Malacca and Srivijaya as trading powers, their influence to date can still be felt. For instance, Malay which was the trading language that was used at the time has become vastly been used in the coastal areas of Singapore, Brunei, Malaysia and Indonesia. The language was critical as it tended to provide a unification of the different cultures of the island worlds.

Role of Europeans

The involvement of the Chinese in the Southeast Asia trade was more seamless and smooth as compared to the Europeans involvement. While the Europeans expansion to Southeast Asia was slow, it was chaotic and haphazard almost in equal measure. The Europeans were drawn to the Southeast Asia by various factor among them being the abundance of spices in the region, particularly cloves, pepper and nutmeg.[6] Additionally, the European wanted to get involved in Southeast Asia in their quest to eliminate intermediaries in the trade. Concisely, the European were not after establishing new trade patterns in the region but rather to profit from patterns of trade that were already in existence. The Chinese merchants had established the existing patterns of trade at the time of European entrance to Southeast Asia in the 16th century. The impact of European involvement in the Southeast Asia trade varied from one region to another, and the extent of force of the impact was irregular[7]. Nonetheless, the impact was forceful almost like colonialism, which did not take place until centuries later. European participation in the Southeast Asia trade was more like a disguise of just another nationality seeking to expand its reach in trade. This lasted only for so long[8].

The Europeans intentions and perspective prompting their engagement in the Southeast Asia was not purely mutual trade. Instead, their intentions were of monopoly and conquest. In other words, the European intended to dominate the Southeast Asia trade. To show their determination in this quest, the European boasted superior military technology, and strategic organization when they came short of goods to trade in or in business acumen.[9] Eventually, Malacca was overtaken by the Portuguese which initiated the decline of this city-state for a very long period of time. Notably, Malacca was at the heart of vast trade, but the Portuguese misunderstood the nature of this trade. Hence, the Portuguese sought to exert monopolistic participation over the spice trade in the region. The Portuguese attempted to control strategic ports situated between Malacca and Maluku, but they hardly established any industry through these efforts. Eventually, the Dutch replaced the Portuguese as the main European representatives in Malacca. However, the Dutch did not gained monopolistic control of the spice trade until Ambon and Banda Islands were seized in 1605 and 1623 respectively. This was after a relentless struggle to prevent the Europeans from introducing their trade perspective.

            The nature of involvement of the European in trade in the Southeast Asia points to the possibility that their role was to usher in a new approach to trade, which was capitalism. This is more so considering the fact that the form of domination exerted by the Dutch all those centuries back has withstood until today[10]. The only difference is that modern form of market domination in the region is seemingly ‘smooth’ in comparison to the approach taken by the Dutch back then. At one point, the Dutch burned down the clove gardens in attempts to reduce the supply of the spices consequently resulting in an increase in prices. These irrational measures but the Dutch ushered in a long period of impoverishment of peasants in Archipelago.

Connecting Southeast Asia to other regions through trade

            The trade networks established during antiquity went along the way on connecting Southeast Asia to other regions particularly Europe and East Asia. Needless to say, Chinese involvement was more diplomatic while the European involvement was forceful and oppressive. Nonetheless, the participation of these participants contributed in increasing Southeast Asia connectivity to other regions. Some of the trade routes used had been in use for centuries.[11] At the onset of the first century A.D merchants and travelers could cross to China through the west from Britain and Spain and to Japan from the east. The main use of the trade routes was to transport raw materials, food and luxury products from regions that enjoyed surpluses to those that were lacking. Notably, some of the regions involved in the trade enjoyed a monopoly of some of the products. For instance, China had bountiful silk. Hence she supplied the Mediterranean and West Asia. On the other hand, Southeast Asia was the hub for spices.

            The arrival of the Chinese ships and merchants is considered to be the index of economic expansion in maritime Southeast Asia. It is important to recap that the Srivijaya trading state did not emerge until the arrival of the Chinese.[12] Furthermore, the strategic location of this state made it optimal to facilitate trade between China, India and Middle East. Consequently, this state connected the Southeast Asia to other regions in this sense. Srivijaya was a major emporium during its time with credit to the straits it controlled at the time. However, Malacca, another major strait empire in the 14th century, overtook the trading port in Srivijaya. Malacca rose to prominence as a major trading port, and there are claims that this state was much more wealthy than modern-day London.[13]

During the 14th century, major trading networks had already been established by the Chinese merchants to the benefit of Southeast Asia. Thus, the extent of these networks saw the rise of bigger trading states like Malacca. Malacca was such a major influence in the Southeast Asia that it became the center of the expansive intra-island trading besides being at the heart of trade with other regions. Concisely, in the absence of the Chinese and the European traders, Southeast Asia would not have enjoyed the vast connection to other regions. In fact, the influence that Malacca and Srivijaya as trading powers reverberate to date particularly the trading language, which is Malay.


            The nature of trade involvement by the Chinese merchants and the European traders in Southeast Asia was significantly different. Nonetheless, they each made a contribution to the trade networks in this region. Looking at it from a rational point of view, the Chinese merchants did more in enabling trade networks for Southeast Asia than the Europeans. This is considering that the approach adopted by the Europeans was more focused on enriching themselves than Southeast Asia. Colonial power in this region had adverse effects on the cultures of the region as they were crushed by the weight of colonial powers[14]. That notwithstanding the general pattern adopted by the colonial powers of divorcing producers from their conventional markets is still present throughout Southeast Asia. It is important to note that the social impact of the trade in Southeast Asia arguably had more profound impact on this region than in any other part of the world. However development was only limited to the coastal areas and other adjacent regions leaving the interior main being relatively undeveloped up to date. Read more about other countries and cultures in this "why is it important to learn about other cultures essay".