1.3 The Canton System and early trade relations
3 min read•july 11, 2024
The , established by the , strictly controlled trade between China and Western nations from 1757 to 1842. It confined Western traders to a small area in Canton, reflecting China's view as the "" and its reluctance to engage with foreign powers on equal terms.
The system relied on Cohong merchants as intermediaries, giving them significant control over trade. However, the trade's devastating effects on Chinese society and the growing tensions between China and Western powers ultimately led to the , marking a turning point in Sino-Western relations.
The Canton System and Early Sino-Western Trade
Canton System for China-West trade
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- Qing Dynasty imposed regulations (1757-1842) controlled trade with Western nations
- Restricted Western trade to port of Canton (Guangzhou)
- Limited Western influence protected Chinese economic interests
- Western traders confined to small area in Canton called
- Not allowed to enter city or interact directly with Chinese citizens
- Trade conducted through guild of Chinese merchants called Cohong
- Cohong held monopoly on trade with Western merchants
- Canton System reflected China's view as "Middle Kingdom" reluctant to engage foreign powers on equal terms
- Believed in superiority of Chinese civilization (Confucianism, advanced agriculture, technology)
- Viewed trade as form of tribute from inferior nations (silk, )
Role of Cohong merchants
- Cohong was guild of Chinese merchants authorized by Qing government to trade with Western merchants
- Acted as intermediaries between Western traders and Chinese officials
- Collected taxes and duties on imported goods (cotton, , )
- Cohong merchants worked closely with Western traders to facilitate trade
- Provided services such as warehousing, transportation, translation
- Some developed close personal relationships with Western traders (business partnerships, friendships)
- gave Chinese merchants significant control over trade
- Set prices and dictated terms of trade
- Frustrated Western traders who felt system was unfair and restrictive (high taxes, limited access to markets)
Opium trade's impact on China
- Opium trade began in late 18th century as British merchants addressed with China
- imported opium from India to China
- Opium illegal in China but demand high and trade highly profitable (addictive drug)
- Opium trade had devastating effects on Chinese society
- Widespread addiction led to social and economic problems (poverty, crime, health issues)
- Silver outflow from China to pay for opium destabilized Chinese economy (currency devaluation, inflation)
- Qing government efforts to suppress opium trade led to tensions with Western powers
- Confiscation of opium stocks in Canton (1839) led to First Opium War
- Opium trade highlighted growing power imbalance between China and Western nations
- China's inability to control trade undermined sovereignty exposed military weakness (outdated weapons, tactics)
Tensions before First Opium War
- Canton System and opium trade were major sources of tension between China and Western powers in early 19th century
- Western traders resented restrictions of Canton System demanded greater access to Chinese markets (trade imbalance)
- Qing government efforts to suppress opium trade angered British merchants who saw it as valuable revenue source
- Napier Affair (1834) highlighted growing tensions
- British diplomat attempted to bypass Canton System negotiate directly with Chinese officials
- Napier's actions violated Chinese protocol led to standoff between British and Chinese forces (naval blockade)
- Confiscation of opium stocks in Canton (1839) was immediate trigger for First Opium War
- British government demanded compensation for seized opium and greater access to Chinese markets
- Qing government refusal to comply led to outbreak of war (1840)
- First Opium War marked turning point in Sino-Western relations
- China's defeat exposed weakness forced concessions to Western powers ( 1842)
- War set stage for further Western encroachment and "century of humiliation" (unequal treaties, territorial losses)
Key Terms to Review (25)
Britain: Britain, specifically referring to Great Britain, is an island nation that played a crucial role in global trade, imperial expansion, and diplomatic relations during the 19th century. Its influence extended to China through early trade systems and international interventions, significantly impacting Chinese sovereignty and economic structures. The British Empire’s pursuit of trade led to key developments in Chinese commerce and prompted conflicts that reshaped Sino-British relations.
British East India Company: The British East India Company was a powerful trading corporation established in 1600, which played a significant role in the trade between Britain and India. It became the dominant force in Indian trade, especially in spices, cotton, tea, and opium, leading to extensive political and economic influence over large parts of India. This company laid the groundwork for British colonial rule in India, particularly during the era of the Canton System and early trade relations.
Canton System: The Canton System was a trade policy implemented by the Qing Dynasty that restricted foreign trade to the port of Canton (modern-day Guangzhou) and established a series of regulations governing interactions between foreign merchants and Chinese authorities. This system reflected the Qing Dynasty's desire to control trade and maintain its sovereignty while also limiting foreign influence in China. The restrictions and regulations of the Canton System played a significant role in shaping early trade relations between China and Western powers.
Clocks: Clocks are timekeeping devices that have played a crucial role in the organization of trade and daily life throughout history. In the context of early trade relations, particularly during the Canton System, clocks helped establish precise timekeeping practices that were essential for coordinating trade activities, managing schedules, and navigating international exchanges with European merchants.
Cohong system: The cohong system was a trade organization established in Canton (Guangzhou) during the Qing Dynasty that regulated foreign trade with Western merchants. This system allowed only a select group of Chinese merchants, known as cohong, to conduct business with foreign traders, creating a highly controlled and restrictive environment for commerce. The cohong system facilitated the Qing government's efforts to manage trade, maintain stability, and control the influx of foreign goods and influences.
Cultural Imperialism: Cultural imperialism refers to the practice where a dominant culture imposes its values, beliefs, and practices on a subordinate culture, often leading to the erosion or transformation of the latter's cultural identity. This phenomenon can be seen through various means such as media, education, and language, resulting in a power dynamic that privileges the dominant culture while marginalizing others. In the context of early trade relations, particularly during the Canton System, cultural imperialism played a crucial role as Western powers sought to expand their influence in China, impacting local customs and traditions.
Extraterritoriality: Extraterritoriality is a legal practice that allows a country's laws to be applied beyond its borders, enabling foreign nationals to be tried under their home country's laws rather than the local laws where they reside. This concept became significant during interactions between Western powers and China, leading to significant diplomatic tensions and shaping modern Chinese history.
First Opium War: The First Opium War (1839-1842) was a conflict between Britain and China that arose primarily due to trade disputes over opium, a narcotic that the British were exporting to China. This war marked a significant moment in Chinese history as it exemplified the impact of Western imperialism, disrupted traditional trade systems, and led to significant territorial and political concessions by China to foreign powers.
Foreign concessions: Foreign concessions were territories in China that were leased to foreign powers, where these powers exercised significant control and authority, typically exempt from Chinese law. These areas emerged during the 19th century, particularly following the Opium Wars, reflecting the broader impacts of Western imperialism on China's sovereignty and its trade dynamics. The establishment of foreign concessions played a critical role in altering China's economic landscape and international relations during this period.
Imperial Expansion: Imperial expansion refers to the process by which a state or nation extends its territory, influence, or control over other regions or countries, often through military conquest, colonization, or economic dominance. This phenomenon was particularly relevant in the context of trade relations, where nations sought to establish and solidify their economic presence in foreign markets, affecting diplomatic ties and local economies.
Lin Zexu: Lin Zexu was a high-ranking Chinese official and scholar during the Qing dynasty, known for his strong opposition to the opium trade and efforts to enforce anti-opium laws in the 1830s. His actions, particularly in Canton, symbolized the Chinese government's resistance to foreign exploitation and set the stage for the First Opium War, as they directly challenged British trade interests and highlighted the growing tensions between China and Western powers.
Lord Napier: Lord Napier was a British diplomat and trade representative who served as the Chief Superintendent of Trade in China from 1834 to 1836. His tenure was marked by attempts to reform the Canton System, which restricted foreign trade and aimed to improve British access to Chinese markets. Napier's diplomatic efforts and his clash with Chinese authorities highlighted the tensions between Western powers and Qing China during a period of increasing trade demands and imperial ambitions.
Mercantilism: Mercantilism is an economic theory and practice that emphasizes the importance of accumulating wealth, particularly gold and silver, through a favorable balance of trade. This concept was prominent from the 16th to the 18th century and significantly influenced trade policies, including those established during early trade relations with China, particularly under the Canton System.
Middle Kingdom: The term 'Middle Kingdom' refers to China's historical self-image as the center of civilization and culture, which persisted through various dynasties, particularly during the Ming and Qing. This notion emphasized the belief that China was superior to neighboring countries and viewed itself as a hub of trade, culture, and governance, influencing its diplomatic relationships and trade practices with foreign entities.
Opium: Opium is a narcotic drug derived from the poppy plant, specifically from the opium poppy's latex. In the context of trade, it became a significant commodity that fueled economic exchanges between China and Western nations, particularly Britain, leading to profound social and political consequences in 19th-century China.
Opium Wars: The Opium Wars were two conflicts in the mid-19th century between China and Western powers, primarily Britain, over trade imbalances and the opium trade. These wars were pivotal events that highlighted the tensions arising from China's attempts to control opium importation, leading to significant shifts in China's political and social structures.
Porcelain: Porcelain is a high-fired ceramic material known for its strength, durability, and translucence. Originating in China, it became a highly sought-after item in global trade, especially during the time of the Canton System, where its intricate designs and quality made it a luxury good among European and other foreign markets.
Qing Dynasty: The Qing Dynasty was the last imperial dynasty of China, ruling from 1644 to 1912, and is known for its significant territorial expansion and cultural flourishing. Established by the Manchu people, it marked a period of both internal consolidation and external challenges, impacting China's trade relations, social structures, and international standing.
Silver: Silver refers to a precious metal that played a crucial role in global trade, particularly during the period of the Canton System in the late 18th and early 19th centuries. It became the primary medium of exchange between Western traders and China, facilitating the exchange of goods such as tea, silk, and porcelain. The influx of silver into China significantly impacted its economy and trade dynamics, shaping early interactions with foreign merchants.
Thirteen Factories: The Thirteen Factories were a group of trading houses located in Canton (now Guangzhou), China, that served as the main hub for foreign trade during the 18th and early 19th centuries. These factories facilitated trade between Western merchants and Chinese officials, becoming essential to the Canton System, which regulated foreign commerce and limited interaction with local markets.
Trade Imbalance: A trade imbalance occurs when a country imports more goods and services than it exports, leading to a deficit in its trade balance. This situation can affect economic relationships between countries, particularly in the context of trade policies, currency value, and overall economic health. Trade imbalances can also reflect disparities in production capabilities and consumer demands between nations.
Treaty of Nanking: The Treaty of Nanking was a pivotal agreement signed in 1842, marking the end of the First Opium War between Britain and China. It established unequal terms that favored British interests, including the cession of Hong Kong to Britain, the opening of five ports for trade, and the payment of indemnities, fundamentally altering China's relationship with foreign powers and highlighting the weaknesses of the Qing Dynasty.
Treaty of Tianjin: The Treaty of Tianjin was an agreement signed in 1856 between the Qing Dynasty of China and the United Kingdom, marking a significant outcome of the Second Opium War. It expanded foreign privileges in China, allowing for greater trade access, legalization of the opium trade, and the establishment of several foreign legations in Beijing, fundamentally altering China's relationship with Western powers and contributing to the decline of the Qing Dynasty.
Treaty of Wanghia: The Treaty of Wanghia was an 1844 agreement between the United States and Qing China that established formal diplomatic relations and opened Chinese ports to American trade. This treaty marked a significant moment in the context of Western imperialism, as it signaled the beginning of broader foreign influence in China and highlighted the impact of the Canton System, which had previously restricted foreign trade to specific areas.
United States: The United States is a federal republic consisting of 50 states and a significant global influence, especially during the 19th and 20th centuries. Its relationship with China has evolved through various historical phases, characterized by interactions ranging from trade to military intervention, shaping both nations' trajectories.