The Manila Galleon and the Trade Monopoly of the Philippine Islands

Spain opened the world's first global trade route through China, the Philippines, Mexico and Seville. This route became the lifeline and supply line for the Spanish royal family to maintain its colonial rule in the Philippine Islands for more than 330 years. At the same time, with the help of this route, early indirect, rather than direct trade was generated between China and Latin America. While countless praises describe this route, it is undeniable that the disadvantages it brought cannot be ignored: the mined silver continued to flow to Asia rather than Europe and did not significantly improve the local agricultural and industrial development in the Philippines at that time. At the same time, the lucrative Chinese materials destroyed the interests of local Spanish merchants, etc. In the last 10 years of the 16th century, the Spanish royal family issued a series of decrees. Franchise, Permiso, Pancada, Boleta and Tariff were superimposed together to form a complete set of trade monopoly business models, which maintained Spain's colonial rule in the Philippines and maintained a certain balance between colonies and between colonies and the mother country to the greatest extent. Unfortunately, it did not promote the long-term development of the first globalization. Under the challenge of other countries and military forces, this route, which was hailed as the most profitable, finally came to an end. This article uses literature analysis to elaborate on five types of trade monopolies and their corresponding laws, expressing that monopoly trade can only create short-term, false prosperity, and long-term trade requires open markets and full competition. This is not only a reflection brought about by the Manila Galleons in the 17th century, but the same principle also applies to the fourth globalization.