French Indochina - Economy

Economy

French Indochina was designated as a colonie d'exploitation (colony of economic interests) by the French government. Funding for the colonial government came by means of taxes on locals and the French government established a near monopoly on the trade of opium, salt and rice alcohol. The trade of those three products formed about 44% of the colonial government's budget in 1920 but declined to 20% by 1930 as the colony began to economically diversify. The colony's principal bank was the Banque de l'Indochine, established in 1875 and was responsible for minting the colony's currency, the Indochina piastre. Indochina was the second most invested-in French colony by 1940 after Algeria, with investments totaling up to 6.7 million Francs.

Beginning in the 1930s, France began to exploit the region for its natural resources and to economically diversify the colony. Cochinchina, Annam and Tonkin (encompassing modern-day Vietnam) became a source of tea, rice, coffee, pepper, coal, zinc and tin while Cambodia became a center for rice and pepper crops. Only Laos was seen initially as an economically unviable colony, although timber was harvested at a small scale from there.

At the turn of the 20th century, the growing automobile industry in France resulted in the growth of the rubber industry in French indochina, and plantations were built throughout the colony, especially in Annam and Cochinchina. France soon became a leading producer of rubber through its Indochina colony and Indochinese rubber became prized in the industrialized world. The success of rubber plantations in French Indochina resulted in an increase in investment in the colony by various firms such as Michelin. With the growing number of investments in the colony's mines and rubber, tea and coffee plantations, French Indochina began to industrialize as factories opened in the colony. These new factories produced textiles, cigarettes, beer and cement which were then exported throughout the French Empire.