d been begun. Externally China's prestige continued at its
zenith. The caravans streamed into China from western and central Asia,
bringing great quantities of luxury goods. At this time, however, the
foreign colonies were not confined to the capital but were installed in
all the important trading ports and inland trade centres. The whole
country was covered by a commercial network; foreign merchants who had
come overland to China met others who had come by sea. The foreigners
set up their own counting-houses and warehouses; whole quarters of the
capital were inhabited entirely by foreigners who lived as if they were
in their own country. They brought with them their own religions:
Manichaeism, Mazdaism, and Nestorian Christianity. The first Jews came
into China, apparently as dealers in fabrics, and the first Arabian
Mohammedans made their appearance. In China the foreigners bought
silkstuffs and collected everything of value that they could find,
especially precious metals. Culturally this influx of foreigners
enriched China; economically, as in earlier periods, it did not; its
disadvantages were only compensated for a time by the very beneficial
results of the trade with Japan, and this benefit did not last long.

4 _The reign of the empress Wu: Buddhism and capitalism_

The pressure of the western Turks had been greatly weakened in this
period, especially as their attention had been diverted to the west,
where the advance of Islam and of the Arabs was a new menace for them.
On the other hand, from 650 onward the Tibetans gained immensely in
power, and pushed from the south into the Tarim basin. In 678 they
inflicted a heavy defeat on the Chinese, and it cost the T'ang decades
of diplomatic effort before they attained, in 699, their aim of breaking
up the Tibetans' realm and destroying their power. In the last year of
Kao Tsung's reign, 683, came the first of the wars of liberation of the
northern Turks, known until then as the western Turks, against the
Chinese. And with the end of Kao Tsung's reign began the decline of the
T'ang regime. Most of the historians attribute it to a woman, the later
empress Wu. She had been a concubine of T'ai Tsung, and after his death
had become a Buddhist nun--a frequent custom of the time--until Kao
Tsung fell in love with her and made her a concubine of his own. In the
end he actually divorced the empress and made the concubine empress
(655). She gained more and more influence, bein