|

China’s tang dynasty and the golden age of Islam

China was ruled by the Tang dynasty for three centuries from 618 to 907 AD. Under the Tang Emperors there was a new legal code and administrative reform including an expansion of the system of imperial examinations for government positions, an institution which lasted in China until 1905. The stability and innovations of the Tang era led to an economic miracle whose impact was felt far beyond the empire’s borders.

The Tang Dynasty coincided with the foundation and expansion of Islam in the Near East. Trade with Tang China greatly enhanced the economies of the newly established Islamic empires - the Umayyads and the Abbassids - and was fundamental to their success. Arguably it was when trade with China went into decline several centuries later that the Islamic empires also receded.

After it’s foundation Islam became the superhighway of the ancient learning of the Near East - Egyptian, Greek, Persian, Mesopotamian, Assyrian, etc. The Abbassid Caliphate (AD 750 - 1258) is considered the most influential precursor state in the West between the Roman Empire and the evolution of the modern state in France and England in the eighteenth century.

China

Texts were translated from Greek, Sanskrit, Persian etc into Arabic and contributed to an intellectual and scientific flourescence without which the subsequent rise of the West is unthinkable. The modern numerical system was borrowed from India via Sindh Province and spread throughout Islam from whence it came to the attention of Italian traders in the Mediterranean and would eventually replace the more cumbersome Roman numerals. The words algebra and algorithm also came from arabic.

One can argue that the rise of the West was due to the discovery and exploitation of the Americas which generated an economic stimulus which, in turn, led to the industrial revolution. The industrial age was unique to the West in it’s foundation period and it eclipsed all other civilisations for several centuries but we are now in an era where industrialisation has spread around the world.

A theme of this column is that China is now the world’s largest economy by some distance and even for those who dispute the methodology there is no denying that it is the workshop of the world with eight times as many industrial workers as the US. The corrollary is that China will, in due course, replace the US as the dominant military and diplomatic power in Asia corresponding to it’s economic might.

The West has always been in a dialectical relationship with Islam and indeed often defined itself against Islam. To this day the US and some of it’s allies continue to act in ways which allienate the Islamic world and only have close relations with those states which depend on them militarily and economically.

The lesson of the Tang Dynasty is that when China is strong Islam is in the ascendant. The view that China is rising is widely held but not the view that China is already well ahead of the US. If the latter view is correct then it will reveal itself over the coming years.

Author

Paul Dixon

Paul Dixon

Latin Report

Paul Dixon’s focus is economics from a long term perspective.

More from Paul Dixon
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD holds steady near 1.1750 on first trading day of 2026

EUR/USD stays calm on Friday and trades in a narrow channel at around 1.1750 as trading conditions remain thin following the New Year holiday and ahead of the weekend. The economic calendar will not feature any high-impact data releases.

GBP/USD struggles to gain traction, stabilizes above 1.3450

After testing 1.3400 on the last day of 2025, GBP/USD managed to stage a rebound. Nevertheless, the pair finds it difficult to gather momentum and moves sideways above 1.3450 as market participants remain in holiday mood.

Gold climbs toward $4,400 following deep correction

Gold reverses its direction and advances toward $4,400 after suffering heavy losses amid profit-taking before the New Year holiday. Growing expectations for a dovish Fed policy and persistent geopolitical risks seem to be helping XAU/USD stretch higher.

Cardano gains early New Year momentum, bulls target falling wedge breakout

Cardano kicks off the New Year on a positive note and is extending gains, trading above $0.36 at the time of writing on Friday. Improving on-chain and derivatives data point to growing bullish interest, while the technical outlook keeps an upside breakout in focus.

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Crypto market outlook for 2026

Year 2025 was volatile, as crypto often is.  Among positive catalysts were favourable regulatory changes in the U.S., rise of Digital Asset Treasuries (DAT), adoption of AI and tokenization of Real-World-Assets (RWA).