2. The China Trade – Accumulating Capital in a Capitalist Age
The Opium War- The Beginning of the End for the Qing Dynasty
The Portuguese were the first Europeans to establish trade relations by sea with China when Father Francis Xavier built a trading post at Shangchuan Island, Taishan (Toishan) county, Guangdong province in 1551 six years before they settled in Macao. Taishan County would later play a large role in Chinese American history.
During the 17th and most of the 18th century, trade with the West developed very slowly as China had little interest in products offered by the Europeans. In 1757, in order to maintain control over the trade with Europeans, China restricted trade with the west to Canton (Guangzhou).
England soon overtook Portugal as China’s largest European trading partner. The balance of trade always favored China as English goods had a limited market in China. England made up their trade deficit with silver. This presented England with a major economic problem as the Age of Capitalism was beginning and capital was critical for development into a capitalist country.
In order to balance trade and accumulate capital, England entered the illicit drug trade. Building huge opium plantations in their colony of India, England started selling large quantities of opium to China. In 1800, England shipped 850,000 lbs. of opium to China; by 1879, shipments totaled 13,400,000 lbs. England had become the largest drug dealer in the world.
The United States also entered the drug trade with opium from Turkey. America faced the same problem as England. It had little to sell the Chinese. The major items that Americans had for sale to China were silver, ginseng roots, furs, and sandalwood. China traders in New England hired local root diggers to forage for ginseng. Fur pelts were traded in the frontier west. But the major source of pelts was seals and otters nesting on the islands located off the tip of South America. Millions of seals were killed on the sea route to China to the point of extinction. In 1796, The Neptune sailed out of New Haven, slaughtered 80,000 seals in the South Pacific, and returned with a profit of $220,000, an enormous sum in those days.
But the real money was in drugs. The list of New England families that made their fortunes in opium included the following: Russell, Perkins, Delano, Cabot, Coolidge, Forbes, Low and Green.
The drug dealers became major capitalists by expanding into banking, insurance, and international finance. Profits from the opium trade build the beautiful residences of Salem, Massachusetts, and helped finance the Union Pacific Railway.(Wakeman, 1975)
The use of Opium created major domestic problems for the Chinese that permeated every aspect of society. In addition, the balance of trade was now in favor of the Westerners as silver to pay for the opium was being drained from the Chinese economy at an alarming rate.
The emperor made one last attempt to control the opium trade. In 1839 he appointed Lin Zexu High Commissioner to eradicate the opium curse. Commissioner Lin wasted no time in formulating a plan. Opium had to be controlled at the source. First he wrote to Queen Victoria:
The Way of Heaven is fairness to all. It does not suffer us to harm others in order to benefit ourselves….Suppose there were people from another country who carried opium for sale to England and seduced your people into buying and smoking it; certainly you would deeply hate it and be bitterly aroused…
– Commissioner Lin, 1839
Commissioner Lin then asked the queen to stop the manufacture of opium in India and destroy all the opium that had already been produced. He also confiscated and burned all the opium in Guangzhou.
Her majesty’s response was swift and brutal. She sent warships to the Chinese coast and bombarded the Chinese into submission. Faced with an enemy with vastly superior firepower and suffering horrendous casualties, the emperor capitulated. The surrender terms were harsh: 1. Open five ports, including Canton and Shanghai, to further develop the opium market. 2. Grant extraterritoriality to all British citizens. 3. Cede Hong Kong to the British.
The defeat of the Chinese in the First Opium War opened the floodgates of hell into China as the evil drug soon devastated the country. Joining the British in exploiting China’s weakness were all the European powers and America. The western countries would continue selling opium to the Chinese well into the 20th century, consigning millions to wasted and destructive lives.
Within England, many saw that opium trade was immoral, but they were in the clear minority.
I am in dread of the judgment of God upon England for our national iniquity towards China.
– William Gladstone, 1842
The opium dealers justified their sale of opium as a kindness to the Chinese.
The use of opium is not a curse, but a comfort and benefit to the hard-working Chinese.
– 1858 press release from the British firm of Jardine, Matheson & Co.
Unable to protect the Chinese people, the Qing Dynasty was losing the Mandate of Heaven.