Han dynasty
To the north of China proper, the nomadic Xiongnu chieftain Modu Chanyu (r. 209–174 BC) conquered various tribes inhabiting the eastern portion of the Eurasian Steppe. By the end of his reign, he controlled Manchuria, Mongolia, and the Tarim Basin, subjugating over twenty states east of Samarkand. Emperor Gaozu was troubled about the abundant Han-manufactured iron weapons traded to the Xiongnu along the northern borders, and he established a trade embargo against the group. In retaliation, the Xiongnu invaded what is now Shanxi province, where they defeated the Han forces at Baideng in 200 BC. After negotiations, the "heqin" agreement in 198 BC nominally held the leaders of the Xiongnu and the Han as equal partners in a royal marriage alliance, but the Han were forced to send large amounts of tribute items such as silk clothes, food, and wine to the Xiongnu.
Xiongnu
Coincidentally, the Southern Xiongnu were plagued by natural disasters and misfortunes – in addition to the threat posed by Punu. Consequently, in 50 AD, the Southern Xiongnu submitted to tributary relations with Han China. The system of tribute was considerably tightened by the Han, to keep the Southern Xiongnu under control. The "chanyu" was ordered to establish his court in the Meiji district of Xihe commandery and the Southern Xiongnu were resettled in eight frontier commanderies. At the same time, large numbers of Chinese were also resettled in these commanderies, in mixed Han-Xiongnu settlements.
Economically, the Southern Xiongnu became reliant on trade with the Han.