Wednesday, January 4, 2017

A brief history of Chinese salt, the world’s oldest monopoly -Salt built empires, launched wars and sparked revolutions

Not such a long time ago, salt was the key commodity underpinning the wealth of nations. It helped build empires, but also launched wars and sparked revolutions.

Why? Because we can’t survive without it.

“Salt built the Great Wall of China and helped turn New York into America’s biggest city. Without it, civilizations would never have thrived and technology would be stuck in the Stone Age,” the Big History projects explains.

There are few other places where salt has had a greater impact than in China. It played a key role in the nation’s history, economic development, and relations between state and society. Still today, China is the world’s leading producer and consumer of salt. But after 2,600 years of exclusive control of the trade, the government on

Chinese salt history probably began with the Yellow Emperor Huangdi – a mythologized and deified figure who is credited with inventing writing, weaponry and ceramics – some 4,700 years ago, according to Jacqueline M. Newman, a professor emeritus at Queens College-CUNY who specializes in Chinese cuisine, history, gastronomy and food culture. At the least, the emperor is credited with presiding over the first war ever fought over salt, she adds.

In early times, salt was rare and reserved for the courts. But as trade expanded and prices soared, salt became a vital source of income and subject to considerable taxation. China was not alone in imposing salt taxes. Athens, Rome, France, Mexico and others did too.

A monopoly has been running in China since the 7th century BCE, when emperors sought to protect the salt trade. By the third to fifth centuries, salt accounted for 80%-90% of state revenues in some of the kingdoms established after the Han dynasty collapsed. The trade was highly corrupt.

“Collecting monies to transport this economically precious commodity began about the 20th century BCE. Using it as money came 3,000 years later,” Newman said. One historian wrote of forty-two different taxes collected just to take salt across Hubei province.

“As a government monopoly, elite salt merchants were selected and authorized to collect taxes on salt. They made a bundle and became rich. Suzhou’s famous gardens were built by salt merchant families.”

Mark Kurlansky writes in his book Salt – A World History that the ancient character for salt, yan , symbolizes how Chinese governments for centuries had seen salt as a source of state revenue and how they controlled its manufacture. It is a pictograph in three parts. The lower part shows tools, the upper left is an imperial official, and the upper right is brine.

“A substance needed by all humans for good health, even survival, would make a good tax generator. Everyone had to buy it, and so everyone would support the state through salt taxes,” he wrote.

Many of the technical inventions that came from the salt trade can be contributed to Li Bing who was the governor of Shu, today the province of Sichuan. Kurlansky describes him as “one of the greatest hydraulic engineering geniuses of all time.” He built the world’s first dam, for one. He also ordered the drilling of the world’s first brine wells.

Salt has also played an important part in Chinese cuisine, as one of the “seven necessities of life” mentioned in proverbs. Song Yingxing, author of the 17th century treatise, The Exploitation of the Works of Nature, explained the essential role of salt:

“…as there are five phenomena in weather, so are there in the world five tastes… A man would not be unwell if he abstained for an entire year from either the sweet or sour or bitter or hot; but deprive him of salt for a fortnight, and he will be too weak to tie up a chicken…”

Venetian merchant traveller Marco Polo described in the 13th century how he visited salt production sites in Yunnan province, and reported that in the mountains “these rascals … have none of the Great Khan’s paper money, but use salt instead….” (Polo’s accurate descriptions of salt production confirm that he had actually been in China.)

Salt has also played a role in modern Indian politics. To fight a British salt monopoly, Mahatma Gandhi and a small band of supporters set off in 1930 on a 241-mile march across western India, called the Salt March. It was an act of nonviolent civil disobedience in colonial India to protest the monopoly which placed tariffs on the mineral and forbid Indians from producing it.

After the Communist Party of China came to power in 1949, it retained the national salt monopoly. The China National Salt Industry Corp decides production levels, prices and distribution channels, issuing permits to about 100 companies allowing them to produce salt.

But once China’s key income source, the salt trade today accounts for only 0.04% of government income.

From January 1, the price of all salt-related products will be decided by the market, and private investors will be allowed to join the salt industry by partnering with existing salt companies, according to the State Council, China’s cabinet.

Now, investors and market watchers hope that larger and more profitable government-controlled industries – such as banking and energy – will take less than 2,600 years to liberate.

Johan Nylander

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