Anglo-Chinese opium trade during the period of the Opium Wars since High 18th

century until the 19th century

Elaborated by

Juan David Londoño Betancur

Maribel Foronda Herrera

Juan Camilo Loaiza Estrada

Subject:

History of International Relations

Presented to:

Juan Oscar Pérez Salazar

Joshua John Henry Large
Ana María Amaya Alviar

School of Administration

Department of International Business

Universidad EAFIT

March 26th, 2019

 Introduction
In the context of the world trading system between the 18th and 19th centuries,
the uprising British empire had an important demand on Chinese luxury goods (mainly
porcelain, silk and tea), however, the multiple restrictions China had against foreign
trade and the lack of interest on what Great Britain had to offer, created a harmful trade
deficit on British economy.

Britain saw the opportunity to reverse the balance of commerce in opium, a

substance grown in India by the East India Company (EIC) and exported to China since
18th century. The relationship between these two countries became closer as a result of
the relevance of commodities such as tea and opium; the former being one of the most
demanded commodities by the British and the Latter by the Chinese, not mentioning
that the process of market globalization in China was led in part by British demand for
tea. Opening this market resulted in several consequences for China and later was the
main reason for a series of Military conflicts between the British and the Chinese.

With the aim of having a comprehensive idea of the opium’s geo-historical

commodity chain during the period of the opium wars between the 18th and 19th century,
it is appropriate to tackle opium’s process of production methods, international and
interregional trade routes and the economic and social conditions after the opium wars.

In this regard, this paper construes the implications of the opium trade and its
impact on the commercial relationships between China and Great Britain, not only
considering the process of exportation but also analyzing the stead of different actors
involved in its production and the trade routes.

Opium uses in the context of the Chinese culture and its arrival as a potential
drug.
The Opium was first used by the Chinese to relieve tension and pain. For them,
it was a medicine for diseases such as diarrhea and dysentery. But the practice of
smoking tobacco spread from North America to the east with the arrival of British
merchants -it first took Philippines, and then, around 1620 this practice took China- and
Chinese started to combine both opium and tobacco for pleasure, so opium smoking
rapidly became popular too (Connelly, 1990). With huge inflows of this commodity into
the country the demand soon increased. The Chinese government – in that time the Qing
Dynasty-, in view of the consequences it was bringing, imposed several restrictions to

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opium trade. Nevertheless, British merchants did all they could to pass across those
prohibitions: they bribed Chinese officials, elaborated new smuggling techniques and
gave free samples of the drug to innocent victims.

Opium production and trade

In first place, it is important to consider this process chain as the result of

economic interactions between the following key players: On the one hand, China
whose economy remained self-isolated due to a remarkable uninterest in Britain’s and
west exported goods. On the other hand, England’s need to address its trade deficit and
its lack of financial resources after having fought wars such as the American War of
independence and the Napoleonic wars. However, throughout the development of these
economic interactions, the emergence of a third would-be player, India (at that time, one
of the Britain’s colonies) is key to understand the connection between the latter and the
former.

In order to face the overwhelming trade deficit, England identified in the lands
of China a new opportunity with a differentiating good whose demand (and market)
would be a means to reverse the unfavorable economic situation. “The British realized
that selling opium to China could help address the imbalance of their purchase of
Chinese tea while at the same time, dumping commodities into India in return could
allow them to purchase raw materials”(Zhong, 2010).

India was the British colony identified as a potential production basis for Opium.
There, the opium trade seems to have taken place without restrictions. Traders and
lenders used to give an advance payment to the peasants who cultivated it. At the
beginning it was the Arabs the ones in charge of selling the opium outside of India,
being China the main objective. But the Portuguese also had bases in India, and
transported opium to China through Macao, a Chinese territory that had been granted to
them (Connelly, 1990).

In 1773, the British installed a monopoly on the sale of opium through the East
India Company, they grew it and produced it ready to consume: in 1797 they
established a monopoly of its manufacture (Connelly, 1990). After that, the peasants
could only sell the opium to the British at the price stablished. “Within this triangular

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trade scheme, Britain was the master, India was the instrument, and China was the
ultimate victim.”(Zhong, 2010, p. 1). The role of the private English merchants
consolidated the arising relationship between both countries at that time; Including the
British East India Company (EIC).

The British East India Company produced opium in India and sold it to China by
means of British and Chinese smugglers. The British East India Company, which
was established to exploit the countries that were occupied in the 1600s by Britain,
controlled all the production and trade in East India (Kalipci, 2018).

However, a century later the EIC had collapsed (by 1874) and the British
colonial government would have taken direct responsibility over the businesses that the
former EIC+Government monopoly had managed for years. Around 1900, the size of
the British Empire had reached its most extended position, controlling by military forces
strategic points of the Opium trade route from India to China (Derks, 2012).

Around 1915, in India, poppy was cultivated approximately in 32 districts of the

United Provinces of Agra and Oudh, south of the Himalaya and Nepal, and in these
regions local people were directly involved in opium cultivation (Derks, 2012);
However, the author points out that there were two major production regions: the
Central Malwa, towards Bombay and Goa, and Northeastern Patna and Benares,
towards Calcutta. The legal framework through which possession, transportation,
exportation and importation was, among others, the Indian Opium Act; whereas its
processes of manufacture and cultivation (the latter with previously fixed areas) were
supervised by agents (such as the Opium Agent at Ghazipur) who would grant licenses
(Derks, 2012).

The selling process was also an important concern under the legal framework, it
was possible to see a not insignificant sale from government to government (e.i to the
Netherlands Indies or the Government of Hong Kong), which reflects the growing
interest in opium as a world-traded commodity (Derks, 2012).

The volume of exports to China and its increasing tendency was a key factor that
led private merchants to participate in the Opium trade; And even before the opium
wars, when the beginning of the monopoly started to raise in 1773, the total of chests
shipped to China was roughly 1000; in the early 19th century, the volume increased to

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4000 and just before the opium wars the annual quantity was about 40000, each of them
weighing around 50 and 60 kilograms (Greenberg, 1951).

The main trade routes: Malwa and Patna Opium trade via Daman, Bombay and
Calcutta to China

The so-called triangular trade between

India, England and China was a concept seen
even before the Opium wars, and its importance
prevails when England found a means to forcedly
open China’s commerce, which granted a
“restricted access” to the main ports and other
destinations in order to commercialize products
(including opium, despite it had been banned by
the Qing Dynasty). Merchants would then use
trade routes not only to carry out this
commodity into Chinese territory but also to avoid trade restrictions imposed by the EIC
as well as the territorial authorities who tried to stop illegal commerce of Opium.

One important market through which Indian traders sold its production was
Daman; “It was used as an alternative route for the passage of opium from Malwa to the
west coast, from Daman opium was shipped to China”(Peabody, 2013, p. 135),
however, places such as Bombay and Calcutta reported higher amounts of exported
chests to China, and from both regions the main arrival destination was the port of
Canton.

The system of commerce through which the Chinese government controlled

foreign merchants’ commercial activities within the country (the Canton system) was
established by the Qing dynasty and used to depend on to the control the west has its
origins since 1760, when the Qing court ordered all ports to close with the aim of
preventing the Ming loyalist Zheng Chengong to raid on the east coast; this order was
strictly followed in the country except in two ports: Canton and Macao, where
foreigners continued to trade with the locals. Therefore, the Canton system from its
inception affected western countries because of the widespread corruption and the

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restrictions on the majority of the trading processes within China’s borders (Zhang,
2010).

The British indeed were not satisfied with the trade restrictions imposed
unilaterally by the Qing dynasty and attempted to take actions by sending several
delegations, including those led by Lord McCartney and Lord Amherst; Nonetheless,
these delegations did not convince the Qing emperor to permit trading beyond the limits
of the port of Canton. According to Zhang, these, along with other facts, “sowed the
seeds for the Opium war that could be seen as partially a British attempt to gain access
to Chinese interior” (Zhang, 2010).

Smuggling and Interregional trade routes

As the Qing restrictions remained and British

endeavors were not effective to remove trade
restrictions; These restrictions and the ban of opium
importations (In 1729 and again during 1796) when
the devastating consequences of opium on the
Chinese population were dramatically exposed in
evidence (Kalipci, 2018) favored the appearance of
smuggling and alternative interregional trade routes:

By 1831, it was estimated that between 100 and 200 “fast crab” smuggling boats
were operating in the waters around Lintin Island, the rendezvous point for
opium imports. Ranging from 30 to 70 feet in length, with crews of upwards of
50 or 60 men […] these swift rowboats could put on sail for additional speed.
They were critical in navigating China’s often shallow rivers and delivering
opium to the interior. (Perdue, 2011,p. 1)

Smuggling was then a phenomenon that not only affected the Chinese
government, but also the British. For instance, “the smuggling along the coast was
officially prohibited by both the Chinese and the English governments. The former
because tax incomes were evaded, the latter because the monopoly prices were negatively
affected”(Derks, 2012, p. 98), hence, smuggling was attacked for both preserving
monopoly prices and sustain the Government’s moral hypocrisy (Derks, 2012).

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 Interregional trade routes had an important role when it comes to the movement
of opium (legally or not) throughout the interior of China; Wu Chengming (1998) cited
by Zhang (2010) asserts that three routes in particular were crucial to long-distance
traders in the country: The first was the east-west route, which followed the middle
Yangzi River, the second route in which the Grand Canal played an important role, and
finally the third route originated at the Gan Jiang (today Gan River) and then passed
over Yu Ling; The Yangzi River and the lower Yangzi region were undoubtedly the
places in which China’s major trade routes had their intersections, which could reach
most of the country’s large commercial centers (Zhang, 2010).

Techniques involved in Opium’s process of production.

The opium production was developed in a huge scale in India, consisting of a

process integrated by different stages of opium manufacture. The main production
center of the company was in Patna, a town in Bihar, 600 kilometers up the Ganges
river from Calcutta. There Indian workers were obliged to work in the poppy fields in
the different sections in which it was divided (Perdue, 2011).

A skilled workman was required to produce at least 100 balls of opium per day.
Then the balls were stacked to be packed in chests made of timber from Nepal.
From Patna, a fleet of native boats took the product down the Ganges River to
Calcutta. (Perdue, 2011, p. 2)

Structure of the factory at Patna, India.

The examining Hall The Mixing Room

“In the Examining Hall the consistency of the “In the Mixing Room the contents of the earthen
crude opium as brought from the country in

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earthen pans is simply tested. A sample from pans are thrown into vats and stirred with blind
each pot (the pots being numbered and labelled) rakes until the whole mass becomes a
is further examined for consistency and purity in homogeneous paste.” (Perdue, 2011, p. 2)
the chemical test room.” (Perdue, 2011, p. 2)

The Balling Room The Drying Room

Crude opium was transported from the mixing
room to the Balling room. “Every man is
required to make a certain number of balls, all
weighing alike. An expert workman will turn out
upwards of a hundred balls a day.” (Perdue,
2011, p. 2)
“In the Drying Room the balls are placed to dry
before being stacked. Each ball is placed in a
small earthenware cup. Men examine the balls,
and puncture with a sharp style those in which
gas, arising from fermentation, may be
forming.” (Perdue, 2011, p. 2)

The Stacking Room Opium Fleet Descending the Ganges on the

Way to Calcutta

“In the Stacking Room the balls are stacked
before being packed in boxes for Calcutta in
route to China. A number of boys are constantly
engaged in stacking, turning, airing, and
examining the balls. To clear them of mildew,
moths or insects, they are rubbed with dried and
crushed poppy petal dust.”(Perdue, 2011, p. 2)
“An Opium Fleet of native boats, conveying the
drug to Calcutta. The fleet is preceded by small
canoes, the crews of which sound the depth of
water, and warn all boats out of the Channel by
beat of drum, as the Government boats claim
precedence over all other craft.” (Perdue, 2011,
p.2)

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 Political effects from opium trade

The political shocks between England and China began when the Chinese
government completely banned the entry of opium into the country, trying to prevent
the drug from reaching more serious dimensions. This act naturally caused England to
feel dissatisfied, a discomfort that gave rise to a war between the countries.

The first Opium war (1839-1842), was primarily caused because Britain was
looking for the opium trade to be open, while China was looking to ban it. British war
technologies were by far superior in comparison to China’s. “Steam war ships, modern
rifles, heavy weapons, and undisputed military superiority soon triumphed (Kalipci,
2018, p. 298). As soon as the strong British navy started attacking Chinese coastal
cities, it was easy for them to defeat a discouraged Chinese army (Kalipci, 2018).

The Chinese were defeated, and such result from

the war, brought the creation of a treaty between the
countries, known as The Nanking Treaty, signed on
august 29, 1842. It stated that China had to do free trade
- opium included - with England through five ports
(Foochow, Amoy, Ningpo, Shanghai and Canton), as
well as the cession of the island of Hong Kong for 150
years. Besides, the Chinese were requested to
compensate a fine of 20 million silver dollars and were force to adhere to a fixed schedule
of customs duties.

In October 1856, the police in Canton had to stop a ship with the British flag, the
“Arrow ship”, accused of smuggling and piracy. The ship was confiscated, fact that led
to the start of The Second Opium war (1856-1860).

Britain was looking for more privileges even after the multiple benefits they
obtained from the first war and the treaty signed, but the Chinese officials and local
population were making efforts to resist to that unfair demands (Kalipci, 2018, p.
300).When the Second opium war started, it was not only Great Britain fighting
against China, but also France. And again, because of tactic advantage, China was
defeated, and they agreed to abide by the Tianjin Treaty, which would allow the
establishment of foreign embassies in Beijing (e.i United Kingdom, France, Russia and
United Stated) as well as the opening of 11 ports for international merchants and trade

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and permitting the internal flow of natural persons. In consequence, by 1858 the
exportation process of this drug to China was legal (Kalipci, 2018).

China, which at first was characterized by its protectionist policies that didn’t
allow the flow of free trade, lost two wars against the British and had to accept the entry
of different foreign powers, corruption among many officials, the growing number of
people addicted to opium, among other conditions that together, made to frame China
within the so called "Century of humiliation", a period in which China had to submit to
the conditions imposed by England and its allies to seize the opium trade.

Economic effects from opium trade

The economic relevance of opium trade for the British can be properly tackled
not only by measuring the profits it brought to British merchants in China, but also by
measuring its relation with the East India Company concerned with Indian and Chinese
affairs (Greenberg, 1951).

As it was mentioned previously, the British exports to the Chinese market

evidenced a slow increase and recessions; This phenomenon can be explained by two
theories in which the social and cultural factors had much to do with: the first is that
Britain’s industrial products were positioned over the living standards of Chinese; the
second theory has to do with Britain’s ignorance regarding Chinese habits and ways of
life, and as a consequence, industrial products were unfavorable for the community
(Zhong, 2010). Britain’s two largest trading partners in East Asia (India and China)
reported to the English government two different economic scenarios, in which the total
value of exports (TVE) increased faster in India than to China.

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 When Britain’s manufactured goods failed in finding to find a market in China,
it is evident to understand Britain’s position towards preserving the opium trade with
China, and the results were dramatically different after the establishment of the
monopoly:

Up to the years between 1854 and 1858, Britain’s trade imbalance with China
was still as much as 7 192 759 pounds a year, 89% of which, however, was
solely covered by the opium trade with 6 365 319 pounds sterling worth of
Indian opium annually exported to China (Zhong, 2010, p. 94)

Opium trade was undoubtedly an investment whose revenues were gradually

higher as the Chinese market was growing and the settlement of merchants in China
favored the appearance of Opium demand.

During the 19th century Opium’s importations became more important. By 1820
its value was around 1% of 53 million rupees, but only five years later it had increased
to 20% of this total trade valued at 58 million rupees. Ten years later just Malwa’s
opium was valued at 35% of all import from the interior; Opium was then the second
most important revenue of the British colonial government in 1885 (£9 million) after the
land rent (£22 million) and salt tax in the third place (£3.6 million), maintaining this
situation for almost 40 years (Zhong, 2010).

Social effects from opium trade

The effects on the Chinese population were absolutely devastating. On average,

the working class used to spend about two-thirds of their salary only on opium. "Many

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Chinese, including the princes and ministers in the capital, had become addicted to
smoking opium. By 1835, 90 % of the male population under 40 was obsessed with this
pleasure-inducing substance. " (Kalipci, 2018, p. 295)

Some Qing officials and the eunuchs used to smoke opium because of the boring
and monotonous life they had inside their court, the soldiers also did it for their routine
life only related to their military activities, while the Qing bureaucracy members, the
lawyers, smoked to get rid of work frustrations; the merchants, meanwhile, thought that
opium helped them to do their business better, and the students themselves used it
during their exams thinking that it helped them obtain better results.

Historians argue that if the total opium ban in China had been successful, some
sectors of the informal economy would have fragmented. This, taking into account that
there were many workers who earned their living thanks to their participation in the
commercialization of opium (from the producers in India, to the people who transported
and sold it in China).

However, in 1729, six years after the emperor Yong Zheng had risen to the
throne, the first edict against opium was proclaimed, in which severe penalties were
established for those who sold and distributed it. The opium sellers were punished with
death by strangulation, and their accomplices were punished with a hundred lashes and
ostracism. British were seem as demons by the Chinese government, who believed that
were completely damaging the Chinese population, and indeed, they were doing so.

Conclusion
There is no doubt that Opium represented an important commodity to the British
and the Chinese as its economic, social and political effects were crucial not only to
develop new trade conditions between bot countries but also to contribute to China’s
markets opening process; However, during this process some cultural and social aspects
were neglected in order to solve economic affairs, which refects the importance of
commercial power at that time and its influence over government actions as well as
population’s habits and customs that, to some extent, were likely to be influence by the
mere forces of Opium’s commercial interactions.

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