Silver was crucial to Europe's early trade with China.

Even before America was discovered, European trade with China played an important role in the colonization of America. After all, America was discovered by an explorer searching for a shorter trade route to China. It is therefore unsurprising that some of the early efforts at colonization in South America were designed to provide the resources needed to continue trading with the Chinese. Silver was one of these key resources.

When the Europeans first started showing up on the shores of China and tried to trade directly with the Chinese instead of obtaining Chinese goods through Arab middle-men, they were frustrated to find that they had little that the Chinese wanted. China contained many natural resources, so it was more or less self sufficient. It also believed in the primacy of its own culture and looked on others, including the Europeans, as inferiors. That meant they were unlikely to have any desire to import European culture.

Thus, Europeans quickly discovered that they had to furnish the Chinese with exotic luxury goods collected from Southeast Asia, like certain types of wood and rare birds, if they wanted to get silks and porcelain to sell for enormous profits in Europe. Eventually, however, the Europeans discovered that they did have one item, silver, that the Chinese did not possess and that they could use in their trade. In discovering an item for which the Chinese would always be willing to trade, European traders made their jobs much easier.

Although the Chinese had some success with paper money, most Chinese consumers preferred to use gold or silver in commerce. By the 1400s, the use of silver had become an important part of the Chinese economy, although China had few natural deposits of silver or any other precious metal. Therefore, China relied on others, particularly Europeans to meet its demand for silver. Thus, silver became a vital part of Chinese/European trade especially because it was one of the only trading commodities that they needed to import.

By the 16th century, trade with China was so profitable and the Chinese continued to have such a demand for silver that Europeans began searching for additional sources of silver. On additional source they eventually discovered was South America. Although a variety of factors motivated European countries to colonize the Americas, silver was one of them. Just as America was discovered by those searching for a shorter route to China, part of the reason that it was colonized was to provide Europeans with the silver they needed in their trade in China.

It is likely that South America would have been colonized eventually if Europe had not needed something to trade with the Chinese, but it might not have been colonized quite as quickly and the colonizing countries may have placed less importance on mining precious metals.