Opium and Tea Trade With China

In 1668, the British East India Company ordered that 100 pounds of "goode tey" [good tea] be sent to Great Britain. By 1793, imports had risen roughly 40,000 percent. The burgeoning trade deficit forced the British government to seek a product they could sell to China to offset their mounting debt. Although the British were producing numerous textiles and woolen goods, such products did not fit the needs or desires of the Chinese market. In the early 1700s, the British East India Company began exporting small amounts of opium from India. By 1839, enough Indian opium entered China to supply 10 million users, and more importantly, enough silver flowed out to turn the trade deficit back to Britain's favor. As the following charts indicate, the opium trade only soared after the Opium War and played no small part in allowing Britain to maintain its position as a global powerhouse.

Questions

  • 1. Does Chart 1 support the claim made by many of Great Britain's officials, politicians, and merchants that if China had granted Britain the free trade they demanded, they could have avoided the forced importation of opium?
  • 2. Given that supply and demand are only part of the equation in the opium trade, what other factors might you suspect influenced the rise in the amount of opium into China?

Chart 1: British Opium Imported to China

Chart 2: British Opium Imports Versus Chinese Tea Exported to Britain

HUANG JUEZI (1793-1853)—A powerful Qing official and leader of a prohibition faction that promoted the outlawing of opium enforced by harsh penalties instead of the legalization sought by other officials.

DAOGUANG (1782-1850)—Seventh emperor of the Qing dynasty, ruling from 1821 to 1850, during a period of tremendous internal turmoil and external threats to the empire.

Huang Juezi on the Evil of Opium (June 2, 1838)

By the early nineteenth century, the Qing state offinancial affairs were in dire straits. After a century of budget surpluses, internal spending had risen precipitously, and the outflow of silver to pay for the importation of opium rocketed upward. As is often the case in economic recessions, while the immediate cause of inflation is relatively clear, discovering a solution to reverse such a trend is far less simple. In addition, Qing officials felt morally obliged to improve the situation for the common people. Qing officials tended to gravitate toward two basic positions. The first group advocated legalization to produce revenue and avoid war with Great Britain. The second group, headed by Minister of Rites Huang Juezi, advocated the prohibition of opium as well as the introduction of the death penalty for all opium users. The following memorial, written by Huang Juezi and other unnamed associates, won over the Daoguang emperor, who, within months, would appoint another prominent official, Lin Zexu, to head the prohibition efforts in Guangzhou.

Questions

  • 1. What factors does Huang consider in his evaluation of the opium problem? How do officials like himself figure in his plan?
  • 2. Why does Huang suggest that attempting to curb foreign trade is a bad strategy?

Your Majesty's unflagging devotion and unrelenting efforts to improve the empire for the ten thousand generations to come is boundless. However, the state's revenue is insufficient and the standard of living remains substandard. The overall situation is bleak and getting worse each year.

What are the causes? During the Qianlong reign, the empire's revenue more than covered the massive financial outlay on border defense, imperial inspection tours, and construction projects. That era can surely be considered one of the most wealthy and prosperous. Even during the Jiaqing period [1796-1819], the economy was healthy enough that gentry families and wealthy merchants still enjoyed a luxurious lifestyle— a lifestyle quite distant from which they lead today. It seems that they believed the wealthy could become wealthier by spending more even as the poor become poorer by being thrifty! Your humble servant noticed that recently the price of silver has steadily increased. A single liang of silver is now more than 1600 copper coins. This rise in the cost of silver is not a result of domestic consumption. Rather, it is primarily a result of the steady outflow of silver to foreign barbarians.

Since opium first began to arrive in China, the Jiaqing emperor understood the harm it could cause China and expressly forbid it. However, officials at that time did not fully realize the detrimental impact of opium on the empire. If they had, strict laws with severe consequences for those who disobeyed would have been enacted from the outset. According to well-established regulations, foreign ships arriving at Guangdong wishing to trade with China must obtain the proper permit from the [Head] Hang merchant. He must guarantee there is no opium on board before they enter the port of Guangzhou. But such regulations are often treated as a mere formality with foreign ships continuing to import opium. As a result, by 1823, the annual outflow of silver exceeded several millions Hang. At the beginning, opium consumption was limited to the wealthy and noble families who smoked it simply as part of their immoderate but lavish lifestyle still displaying a degree of self-control. Later, people of all backgrounds, including government officials, gentry, merchants, servants, women, Buddhist monks and nuns, Daoist priests, took up the opium habit and smoking opium publicly and purchased smoking equipment. Recently the opium smoking fad has reached even Beijing, the political center of the empire!

[•..]

By now everybody has begun to recognize a central cause of the empire's economic downturn is the outflow of silver caused by the demand for opium. Different people have put forward a wide array of solutions for this problem. Some people suggest a system of strict inspections at the port-of-entry as a dual deterrent: to stop both the influx of opium and the outflow of silver. On the surface this makes sense, however, who will guarantee that every inspector is honest? Annual trade today has reached a level that exceeds several tens of millions liang. Even a modest cut in trade would result in a reduction of several millions liang of silver. With such huge potential profits, which inspector would seriously implement the regulations? Even if occasionally a few smugglers could be detained, [China's] coastline is over ten thousand li long, which would allow smugglers an almost endless number of harbors to enter or leave, easily evading any efforts to deter them. That's the first reason of why the outflow of silver cannot be stopped.

Some people have suggested we should attack the source of the problem by simply eliminating all foreign trade. This too seems to make sense on the surface, but individuals who suggest this overlook the fact that the legitimate portion of foreign trade consists primarily of woolens, clocks and watches in exchange for tea, rhubarb, and silk and accounts for no more than ten million liang with a profit for those involved of only several million liang. Thus, lawful trading contributes only 2 to 3 percent of the profit made from the opium trade. Even if we set aside the tariff revenues collected by Guangzhou's maritime customs by banning foreign trade, opium ships could instead choose to anchor off the coasts while the price and demand for opium would undoubtedly rise. As demand from the inland opium smokers increases, miscreants will realize the profits to be made and will willingly engage in smuggling. Thus the second reason for stemming the outflow of silver is that it is harder to control deceitful opium smokers than foreigners.

Some people suggest harsh action against dealers through the enforcement of the strict prohibition of opium dens. Though such steps would not cure the root of the problem, it could reduce its traffic. Those who propose such an idea seem to be unaware that rules and regulations already exist. Convicted opium dealers can be punished with exile to the distant border frontiers. If it can be proved that the opium den owners coaxed innocent young people to smoke, the penalty is death by hanging. Yet while both the numbers of opium dealers and dens are countless, very few officials are able to handle the cases. The major Guangdong opium dealers have established extensive networks with contacts in every province along their supply routes guaranteeing safe delivery anywhere they wish. Officers responsible for land and water passes tolerate and assist the smugglers' trafficking. Instead, under the guise of carrying out opium inspections, officials often harass lawful merchants forcing them to pay bribes. . . . This is the third reason the outflow of silver cannot be stopped.

Some suggest stopping the ban on opium and legalizing domestic production so that local opium would curb the need of foreign import. Gradually, the outflow of silver would be controlled. They are unaware of the fact that domestic opium is not strong enough for domestic addicts. Smugglers only use it to mix with foreign opium to raise their profits. Therefore, legalizing domestic opium will not stop the outflow of silver. This is the fourth reason.

[••]

If foreign barbarians can resist and prohibit the use of opium through legal statutes, Your Majesty's authority can certainly allow us to do the same. . . . When the imperial edict is first issued, it has to be strict. Only when the imperial edict is strict, will the officials implement it seriously; only when the officials are serious will the people not violate the law. Within a year of the law being enacted 80 or 90 percent of the smokers will end their addiction before any penalty is imposed upon them. In this way the law, will not only cause smokers to end their addiction and live out the rest of their lives in peace, but since nonsmokers will never be enticed to take up the habit they will live healthy normal lives. Exercising your Majesty's supreme power in this way is virtuous. I beg for your edict to order governor-generals and governors of all provinces to publicize the regulations and proscription on smoking opium.

 
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