Final answer:
The high European demand for silk contributed to a specialized Chinese economy and a favorable trade balance that made China wealthy and powerful. China controlled trade through the Canton System and required silver for trade, drawing substantial economic gains from Europe.
Step-by-step explanation:
The European desire for silk significantly affected China, leading to a prosperous economy focused on specialized production. The labor specialization within China's economy saw peasants raising mulberry trees for silkworms, producing silk for exports that were in high demand in Europe. This demand for luxurious commodities such as silk, porcelain, and tea led to a favorable balance of trade for China, thereby inflating China's wealth and power.
Despite this economic boom, China exercised caution and maintained control over its trade, implementing the Canton System to manage foreign trade with Europe. The heavy European demand and willingness to pay in silver resulted in substantial economic benefits for China, making it rich and powerful. However, when silver became the monetary base for Chinese currency, and as population expanded, China still required silver imports to sustain its economy. Europeans exploited this by trading silver for Chinese goods, further cementing China's economic wealth.
While European nations eventually sought to erode China's trade advantages through means such as the opium trade leading to the Opium Wars, the initial period of silk trade contributed to China's rich civilization and powerful economy.