Northwestern Indians understood that silk was a rare product that China could offer to other places that had not yet been able to create it, and thus it would be a lucrative product (The Silk Road: Linking ). They became middlemen in the trade between China and other countries along the Silk Road. In addition to China's export of many items that were considered exotic by other countries, China also received many imports that were foreign to them. These items included vessels made of gold and silver, fine glass, fragrances, spices, grapes, and even animals like lions and ostriches (Dunhuang Caves in China).
Trade along the Silk Road brought a variety of effects and consequences. The Han dynasty was a period of major cultural diffusion in China and other nations. For example, the Silk Road is the method in which Buddhism traveled to China from India (The Silk Road: Linking ). Buddhism would later be a major religion in China. Foreign germs would through to have made their way to China through means of trade. Smallpox is said to have arrived in China sometime in the first century, carried by merchants from India (Sextants of Beijing 17). .
The tributary system was developed at this time. The system was established as an "ideal formula for dealing with outsiders that, it hoped, would overcome the disagreeable reality that some of them showed no particular inclination to assimilate or to abandon their own clultures" (Sextants of Beijing 14). The important steps included in this system included envoys paying their respects to the emperor and acknowledging their lesser rank, tributary states sending a high ranking official or member of the royal family to China as a hostage, and shipment of exotic goods as a symbol of accolade (14). China would reciprocate by sending extravagant gifts in order to create a positive standing with other nations (14).
The major foreign relations issue of the time was the conflicts with the Xiongnu, their neighbors to the north-west.
