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Recently excavated ceramic fragments from 2200 years ago constitute the earliest evidence of human habitation in the Hoi An area. They are thought to belong to the late-Iron Age Sa Huynh civilisation, which is related to the Dong Son culture of northern Vietnam.

From the 2nd to the 10th centuries, this was a busy seaport of the Champa kingdom. Persian and Arab documents from the latter part of the period mention Hoi An as a provisions stop. Archaeologists have uncovered the foundations of numerous Cham towers around Hoi An: the bricks and stones were reused by Vietnamese settlers.

In 1307 the Cham king married the daughter of a monarch of the Tran dynasty and presented Quang Nam province to the Vietnamese as a gift. After his death, his successor refused to recognise the deal and fighting broke out: for the next century chaos reigned. By the 15th century peace had been restored, allowing normal commerce to resume. During the next four centuries Chinese, Japanese, Dutch, Portuguese, Spanish, Indian, Filipino, Indonesian, Thai, French, British and American ships came to Hoi An to purchase high-grade silk (for which the area is famous), fabrics, paper, porcelain, tea, sugar, molasses, areca nuts, pepper, Chinese medicines, elephant tusks, beeswax, mother-of-pearl, lacquer, sulphur and lead.

The Chinese and Japanese traders sailed south in the spring, driven by winds from the northeast. They would stay in Hoi An until the summer, when southerly winds would blow them home. During their four-month sojourn in Hoi An, the merchants rented waterfront houses for use as warehouses and living quarters. Some traders began leaving full-time agents in Hoi An to take care of off-season business affairs. This is how foreign colonies got started, although the Japanese ceased coming to Hoi An after 1637, when the Japanese government forbade all contact with the outside world.

Hoi An was the site of the first Chinese settlement in southern Vietnam. The town’s Chinese hoi quan (congregational assembly halls) still play a special role among southern Vietnam’s ethnic Chinese, some of whom come to Hoi An from all over the region to participate in congregation-wide celebrations. Today 1300 of Hoi An’s population of 75, 800 are ethnic Chinese. Relations between ethnic Vietnamese and ethnic Chinese in Hoi An are excellent, partly because the Chinese have become assimilated to the point where they even speak Vietnamese among themselves.

This was also the first place in Vietnam to be exposed to Christianity. Among the 17th-century missionary visitors was the French priest Alexandre de Rhodes, who devised the Latin-based quoc ngu script for the Vietnamese language.

Hoi An was almost completely destroyed during the Tay Son Rebellion. It was rebuilt and continued to serve as an important port for foreign trade until the late 19th century, when the Thu Bon River (Cai River), which links Hoi An with the sea, silted up and became too shallow for navigation. During this period Danang (Tourane) began to eclipse Hoi An as a port and centre of commerce. In 1916 a rail line linking Danang with Hoi An was destroyed in a terrible storm; it was never rebuilt.

Under French rule Hoi An served as an administrative centre. During the American War the city, with the cooperation of both sides, remained almost completely undamaged.