Although their fleet only included a handful of junks when the Mexicans first arrived, twenty to sixty began visiting Manila yearly; by the seventeenth century, fifty routinely arrived annually.  By law, the junk traders had to obtain licenses from the Spanish before they could set sail to Manila or other points in their usual Pacific circuit.  Initially fifty Hokkien junks were licensed annually to trade with different foreign ports in Southeast Asia, the number raised to 88 in 1589 and again to 110 in 1592 and to 137 in 1597; fully half of these licenses went to those who dealt with Mexican merchants in Manila.  Most of the traders, however, were authorized, privately-owned maritime enterprises, aptly fitting the description as “freewheeling Chinese traders.” (Kuwayama, p. 13).  Others called them smugglers or pirates, exemplified by the colorful Limahong, who attacked Manila with a large fleet of junks in 1574.  (Schurz, p. 26).  Licensed or not, it did not appear to matter to the Mexican merchants, who described these richly laden vessels as big ships, or “navíos grandes.” They noted that they generally came in groups and armed (“en forma de flota y armada, vienen en esquadras”) (In the form of fleet and navy, they came in squads), usually arriving with the monsoon at the end of March; the voyage from the China coast took fifteen or twenty days.  (Morga, p. 311)

  As their numbers rose, however, they began to unnerve and alarm the handful of Mexicans who began to build their settlement inside the city walls of Manila when it was officially founded as a Spanish city in 1571.  Their numbers were few, their occupations representing only a few segments of Spanish society in New Spain.  As described by a contemporary observer:  

Los Españoles… se dividen en cinco suertes de personas, que son prelados, religiosos y ministros eclesiásticos, seculars y regulares; encomenderos, pobladores, y conquistadores; soldados, oficiales, y ministros de la guerra, por tierra y mar y navegaciones; mercaderes, y hombres de negocios y contrataciones; ministros de su Majestad, para el govierno, justicia, y administración de su hazienda real. (Morga, p. 308)

The Spaniards ... are divided into five lots of people who are bishops, religious and ecclesiastics, seculars and regular ministers; trustees, settlers and conquerors ; soldiers, officer , and ministers of war, by land and sea and sailing ; merchants, and businessmen and contractors; ministers of His Majesty, for government, justice, and the administration of its real estate."

In other words, Spaniards in Manila represented the Church, the colonial administration, the military, the merchants. There were no servants, craftsmen or artisans, cultivators or manual laborers, people who cooked and made shoes and clothes, etc.  Mexicans quickly figured out that all these basic necessities of everyday life, both goods and services, could be provided by the Chinese.  

In 1580, fear and anxiety led to the official decision to expel the Chinese from Intramurosand segregate them outside the city walls, in a designated ghetto on the other bank of the Pasig River from Binondo that acquired the name of Parián.  This became the heart of the Chinese community, made up primarily of Hokkien speaking people from Minnan, who were almost all non-Christians who resisted or refused outright to convert.  Chinese conversion was slow and few, “never more than three to four thousand Catholic Chinese at any one time,” even as the Chinese population itself steadily grew; the Catholic Chinese quarter of Binondo never exceeded 1,000, while the Parián population would grew to 30,000 or more at its height.  (Wickberg, p. 16-19; Schurz, p. 79; Bernal 1966; Santamaria). Bishop Salazar also reported on the founding of the first Parián by Governor Gonzalo Ronquillo, but provided no precise date; see Salazar).  Outside of these designated neighborhoods, Chinese could not live, nor could they wander far from the city without permission.  Most of all, they could not stay overnight inside the city walls, or else they would face the penalty of death (Morga, p. 321)[1] In time, these residential rules had to be relaxed somewhat for those Chinese who took up farming and fishing occupations, producing on Luzon island much of the natural produce demanded for daily living.   They lived “roundabout,” according to Dominican missionaries who kept track of them.  (Santamaria, pp. 89-90).

The flow of Chinese to Manila was also noted in China itself, as remarked by the chronicler Zhang Xie in 1617:  “The Chinese who visit Luzon are consequently many. They often stayed on and did not return, and they called this yadong.[2] They stayed together in the jiannei (inner stream)[3] to make their living, and their numbers gradually rose to several tens of thousands.  One hears that some cut their hair and produced sons and grandsons there… .” (cited by Wang, p. 411-12).   In the words of noted historian of Southeast Asia Wang Gungwu, Manila “was the first truly large Chinese community overseas and easily the largest one in the sixteenth century.” (Wang, p. 409) To have their hair cut was a reference to being converted. Los Cristianos, solo difieren, en que traen el cabello cortado, y sombreros como Españoles The Christians only differ in that they wear their hair short, and their hats like the Spanish. (Morga, p. 321). It was a sensitive issue, according to Bishop Salazar, because many Chinese resisted conversion if required to cut their hair, being against the law in China. (Salazar; p. 232 in Blair and Robertson translation). Also important to note is that, according to the Chinese chronicler, already by 1617, some older Chinese residents were producing grandchildren, a testament to permanence and family.