For much of the early 700s, the Chinese Empire, under the T'ang dynasty, was successful in its foreign affairs. They recovered crucial lands they had previously lost and stabilized the Tibetan frontier. They secured trade routes through central Asia and contained threats from the Khitan and Hsi peoples. In the late 740s, Chinese troops claimed lordship over Kabul and Kashmir of India. But their string of victorious campaigns could not last forever, as China discovered at Talas River in 751.
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Islam's widespread emergence coupled with China's over-expansion, led to the Battle at Talas River, the only battle between Arab Muslim forces and the army of the Chinese Empire. The Chinese troops were led by Kao Hsien-chih, who had been successful in battles in Gilgit and in the Farghana region. But his success did not carry over, as the Muslim armies were victorious. The Muslims chose not to pursue the Chinese into central Asia.
While the battle in itself was of minor importance, its ramifications on the future were very significant. The Arabs were put in a position to extend their Islamic influence throughout central Asia and its silk routes. The T'ang (in China) lost a good amount of power and their westward advance was halted. Muslim shipping in the Indian Ocean improved, which restricted the ocean's contacts with Hindu and Buddhist areas. The Muslims were never able to take control of the Himalayan northern borderlands. Paper manufacturing, an unexpected byproduct from the Battle of Talas, was first spread to Samarkand and Baghdad, then from there carried to Damascus, Cairo, and Morocco, and finally entered Europe through Italy and Spain. This diffusion originated when Chinese prisoners who knew how to make paper, an art discovered in China at least 650 years earlier, were taken by the Arabs at the Talas River. But most importantly, the Battle of Talas led to the An Lushan revolt, which broke out in 755. This rebellion paralyzed China for years and weakened the Tang dynasty until it collapsed a century and a half later.
Sources:
Twitchett, Denis, The Cambridge History of China (Cambridge University, Cambridge, 1979).
McNeil, William, The Rise of the West (University of Chicago, Chicago, 1963).
Kennedy, Hugh, The Prophet and the Age of the Caliphrates (Longman, London, 1986).
Garraty, John A. and Gay, Peter, The Columbia History of the World (Harper and Row; New York, 1972).