Silk Route

A trade route that involved extensive silk trading, extending from Asia to the Mediterranean, going through China, Persia, India, Greece, Italy, and Arabia

What was the Silk Route?

The Silk Route was a trade route that originated in the second century B.C. and lasted until the 14th century A.D. It extended from Asia to the Mediterranean, going through China, Persia, India, Greece, Italy, and Arabia. The route was called the Silk Route because extensive silk trading was conducted during the period.

 

Silk Route

 

During the period, silk was a valuable fabric invented in China, which originally dominated the silk market until the secrets of silk production spread across the world. Apart from silk, the route boosted the trading of fruits, vegetables, spices, grains, wood, animal skin, metal, and other valuable items.

 

Breaking Down the Silk Route

The Silk Route comprised multiple ancient trade routes that were created to connect China to Europe and the Middle East. The entire route was created strategically, as it was a combination of markets, storage facilities, and exchange points. The combination was called the Silk Route.

During the period, merchants and travelers used horses and camels to travel and typically stayed at inns or guest houses every other day. According to geographers and archaeologists, travelers on the Silk Route enjoyed the advantage of stopping at ports for freshwater and trading opportunities, as there was a maritime route.

The creation of the Silk Route improved economic and financial wellbeing in regions that were along the route, as various products flowed from East to West and vice-versa. At one point in time, goods like paper and gun powder that originated in China were traded to countries in the West. The trading of paper was important to the West, as it led to the creation of the printing press.

 

Major Events on the Silk Route

  • Around 330 BC, Alexander the Great contributed to the development of the Silk Route.
  • In first century BC, the Roman Empire became part of the Silk Route.
  • Ban Chao conquered the Western Regions through the Silk Route.
  • The first diplomatic relations formed between China and the West in 164 BC.
  • The Mongol dynasty conquered large parts of Asia through the Silk Route.

 

The Current Route

In 2013, China began to re-establish the ancient Silk Route under President Xi Jinping with the help of the United Nations Educational, Scientific, and Cultural Organization (UNESCO). The Chinese government and UNESCO launched a $900-billion project called “One Belt, One Road” (OBOR) to improve China’s connectivity with Asian, Mediterranean, European, and East African countries.

A total of 60 countries will be part of the OBOR project. Multiple sea and land routes will be included in the project, but the land and routes will be part of the Belt and Road project (BRI). The ancient Silk Route was land-based, but the new 21st century Silk Route will be primarily sea-based, improving the connectivity of China’s southern coast to the rest of Central Asia, Europe, Africa, and the Mediterranean.

The goal to restore the Silk Route is to improve domestic growth by exporting cheap China-made goods and materials. Since 2013, China’s made tremendous progress on the OBOR project by signing hundreds of deals. In January 2017, along the historic route, a new rail service was formed called the East Wind Freight train from Beijing, China to London, England, passing the English Channel to reach England. The entire journey takes 16 to 18 days, clocking in 7,500 miles.

 

The Legacy of the Silk Route

The greatest benefit of the Silk Route was the exchange of religion, culture, philosophy, art, language, science, and other intangible aspects of civilization between countries. On the other hand, it was a network through which diseases traveled, as was evident in 542 CE when the bubonic plague was brought to Constantinople through the Silk Route and destroyed the Byzantine Empire.

Due to the havoc caused in the Byzantine Empire, the Silk Route was closed, which initiated the age of discovery, as merchants and travelers were forced to take the maritime route. It was the beginning of a new area that gave birth to the concept of global interaction or globalization. During the Silk Route time, people’s understanding of the world they lived in broadened, which led European nations to discover the so-called “New World of the Americas.”

 

Related Readings

CFI is the official provider of the global Certified Banking & Credit Analyst (CBCA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional resources below will be useful:

  • Imports and Exports
  • North American Free Trade Agreement (NAFTA)
  • International Trade
  • World Trade Organization (WTO)

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes and training program!