The ancient Chinese invented sericulture-the production of silk fabric. They opened the silkworm cocoon to extract silk filaments, twisted the threads, and dyed the fabric they produced. Silk fabric has long been prized, and correspondingly expensive, so it was a valuable source of revenue for the Chinese, so long as they could monopolize production. Other luxury-loving people were eager to prise their secret, but the Chinese guarded it carefully, under pain of execution. Until they learned the secret, the Romans found another way to share in the profit. They manufactured silken products. The Parthians found a way to profit, too -- by serving as middlemen.
The Chinese Monopoly on Silk Production
In "The Silk Trade between China and the Roman Empire at Its Height, 'Circa' A. D. 90-130," J. Thorley argues that the Parthians (c. 200 B.C. - c. A.D. 200), serving as trading intermediaries between China and the Roman Empire, sold fancy Chinese brocades to Rome and then, using some deceit about silkworm cocoons in the Roman Empire, sold re-weavings of gauzy silk back to the Chinese. The Chinese, admittedly, lacked the technology for the weaving, but they might have been scandalized to realize they had provided the raw material.
The Silk Road Prospered
Although Julius Caesar may have had silk curtains made from Chinese silk, silk was in very limited supply in Rome until the time of peace and prosperity under Augustus. From the late first century to early in the second, the whole of the silk route was at peace and trade prospered as it never had before and never would again until the Mongol Empire.
In Roman Imperial history, the barbarians kept pushing at the borders and clamoring to be let in. These would-be Romans had been displaced by other tribes further out. This is part of a complicated stream of events that led to the invasions of the Roman Empire by Vandals and Visigoths, nicely treated in Michael Kulikowski's The Gothic Wars.
The Barbarians at the Gates
Thorley says that a stream of similar border-pushing events led to the efficiently functioning silk route of the period. Nomadic tribes called the Hsiung Nu harassed the Ch'in dynasty (255-206 B.C.) into building the Great Wall for protection (like Hadrian's Wall and the Antonine Wall in Britain were supposed to keep out the Picts). Emperor Wu Ti forced out the Hsiung Nu, so they tried to get into Turkestan. The Chinese sent forces to Turkestan and took possession of it. Once in control of Turkestan, they built trade route outposts from North China to the Tarim Basin in Chinese hands. Thwarted, the Hsiung Nu turned to their neighbors to the south and west, the Yueh-chi, driving them to the Aral Sea, where they, in turn, drove out the Scythians. The Scythians migrated to Iran and India. The Yueh-chi later followed, arriving in Sogdiana and Bactria. In the first century A.D., they migrated into Kashmir where their dynasty became known as the Kushan. Iran, to the west of the Kushan empire, came into Parthian hands after the Parthians wrested control from the Seleucids who ran the area after the death of Alexander the Great. This meant that going from west to east in about A.D. 90, the kingdoms controlling the silk route were only 4: the Romans, the Parthians, the Kushan, and the Chinese.
The Parthians Become the Middlemen
The Parthians persuaded the Chinese, who traveled from China, through the Kushan area of India (where they presumably paid a fee to allow them to travel through), and into Parthia, not to take their merchandise further west, making the Parthians middlemen. Thorley provides an unusual-looking list of exports from the Roman Empire that they sold to the Chinese. This is the list that contains the "locally" acquired silk:
"Gold, silver probably from Spain, and rare precious stones, especially the 'jewel that shines at night', 'the moonshine pearl', 'the chicken- frightening rhinoceros stone', corals, amber, glass, lang-kan (a kind of coral), chu-tan (cinnabar?), green jadestone, gold-embroidered rugs, and thin silk- cloth of various colours. They make gold-coloured cloth and asbestos cloth. They further have 'fine cloth', also called 'down of the water- sheep'; it is made from the cocoons of wild silk-worms. They collect all kinds of fragrant substances, the juice of which they boil into storas.
It wasn't until the Byzantine era that Romans really had their own silkworms.
"The Silk Trade between China and the Roman Empire at Its Height, 'Circa' A. D. 90-130," by J. Thorley. Greece & Rome, 2nd Ser., Vol. 18, No. 1. (Apr. 1971), pp. 71-80.