China accepted to trade with the foreigners, but believed it was doing them a great favor and imposed significant restrictions. Traders could only do business in Canton, at certain periods of the year, and could only deal with representatives of the Co Hong, a company of Chinese merchants. As China considered itself self-sufficient, it demanded payment in silver piasters from Spain's colonies in America. In 1810, it was estimated that about 350 million Mexican dollars had been introduced into China since the 17th century. This displeased the English mightily. They would have much preferred to trade than to suffer such a cash outflow.
Two great nations, radically different, one ancient, the other brilliantly on the rise, needing to trade and do business together. Such things are not accomplished without making waves ...
The growing British love affair with tea forced the Chinese to increase their production. As tea became more profitable, the peasants converted their cotton fields into tea plantations. The Chinese then needed to import cotton. Gradually, the English merchants succeeded in trading cotton from their Indian colonies for crates of tea. In 1773, they discovered another product even more in demand by the Chinese: opium. Despite the Emperor's bans, thousands of crates of opium were soon imported into China, and its use increased at all levels in society.
The Emperor tried in vain to stamp out imports of opium. In 1839, an imperial decision decreed the closing of Canton to foreigners. The English replied by blockading the city, thus setting off the first Opium Wars. The clear superiority of the British in terms of arms gained them victory. The 1842 Treaty of Nanking awarded the British excellent conditions, including the freedom to trade in opium, the end of the obligation to deal exclusively with the Co Hong and above all the concession of an island, Hong Kong, on which to establish their commercial base.
©1996: Centre d'histoire de Montréal
Picture source: Chine d'hier et d'aujourd'hui