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China Trade and the East India Company

China Trade is one of the main features in the East India Company archives, now part of the India Office Records. The East India Company's relations with China were fraught with complications from the early 17th century to the mid 19th century.  

History of China Trade

Records of China Trade

China map

Map of China of Ming dynasty, reproduced in 1750. ©The British Library Board [map *60875 (34)]

History of China Trade

From the time when progress in marine technology made it possible to explore sea routes, numerous attempts were made by the Europeans to establish commercial contact with China, a country believed to possess some of the "finest of treasures".  The Portuguese appeared in Chinese waters before the British in the early 16th century. Their skills in coercion, diplomacy, and in the suppression of piracy undoubtedly helped them to gain territorial rights at Macao in 1557. Subsequently, they opened trading enclaves at Ningpo, Foochow, and Amoy along the coast to the north.

The first British attempt to find trade routes to China was made in 1596, but the fleet under the command of Captain Benjamin Wood failed to reach its destination and was lost without trace. Some forty years later in 1637, a Captain Weddell successfully landed at Canton after forcing a passage through the Bogue (from Portuguese word bocca, a mouth), and opened trade negotiations with the locals on behalf of the East India Company. Nevertheless, his entry to China met fierce resistance from the Chinese officials and he was forced to leave the country without any commercial success. His ship was wrecked on his journey home.

Sailing formation

Sailing formation of an entire fleet from England to China, in the log of ship Rochester, 27 August 1710. [L/Mar/B/137B, f.9v]

In 1672, the English East India Company finally secured a trading post in Taiwan - ten years after the Dutch East India Company had been expelled from the island by the Chinese. The Company was soon engaged in direct and regular trade with the Chinese from that base and was permitted to make regular voyages to Amoy, Chusan and Canton. By the turn of the century, the Company's base for the China trade was transferred from Taiwan to its "factory" at Canton. With its Royal Charter, the Company was granted the privilege of monopoly of trade in the East Indies until 1833.

From 1700 onwards, most foreign traders were confined in Canton, where rigid restrictions were imposed through the practice of Co-hong, a guild of Chinese merchants, the sole recognized agency between foreign and Chinese merchants. The Hongs were the only merchants licensed by the Chinese officials to deal with the foreign traders. They were made responsible not only for all business deals with foreigners, but for their debts and behaviour as well. However rich and influential they were, the merchant class was traditionally despised by the mandarin class in China. The Hong merchants, as a result, could not enjoy the full rights of profiting from the trade. They were under the jurisdiction of a local governor and a customs officer who was required to pay a large sum every year to the government and subsequently he recovered his cost several times over by levying heavy taxes on foreign ships (including one for measuring the length of incoming ships) and by taking huge cuts from the deals made by the Hong merchants, who in their turn passed the tax burden to the foreign traders. The limited trading ports and the exorbitant fees paid to the customs officer via Hong merchants were the main grievances expressed by the Company traders. Seeking ways of by-passing the restrictions imposed by the local officials at Canton, the Court of Directors of the East India Company proposed sending a royal envoy to the Imperial Court at Peking to negotiate a preferential treaty.

The first British ambassador to China, Lord George Macartney (1737 - 1806), a distinguished diplomat and colonial administrator, set sail for China in September 1792 and the voyage lasted nearly a year. 

Portrait of George Macartney

Portrait of George Macartney by W.Alexander, 1793 [WD 959, f.19]

He was accompanied by his Secretary Sir George Staunton (1737-1801) and his eleven-year-old son, a linguistic genius who had learned to speak and write Chinese. Other distinguished personalities in his entourage include William Alexander (1767-1816), a painter who recorded the entire event in water-colour sketches, and three craftsmen specialized in metallurgy, weaving and pottery, who were ordered to observe the technological developments made by the Chinese. On board the ship, Macartney carried £15000 worth of presents from the East India Company, the highlight of which was a Planetarium with the latest astronomical technology from Europe, to be presented to the Emperor of China.

Planetarium

Planetarium, present to the Emperor of China, 1792-94. By William Alexander. [WD 961, f42v]

In September 1793 Macartney was finally granted an audience with Emperor Qianlong to whom he presented the valuable gifts and a letter from George III, in which the King of England requested permission from the Emperor to establish a British Resident Minister in Peking in charge of overseeing trading affairs. During the interview, the child Staunton was an instant star, who delighted the elderly Emperor with his fluent spoken Chinese.

Macartney's first meeting with Qianlong.

Macartney's first meeting with Qianlong. The boy on the right is the eleven-year-old George Staunton who impressed the Emperor with his spoken Chinese. By William Alexander.[WD 961, f.57]

A few days later, Macartney and his entourage were invited to the Emperor's eightieth birthday party but to Macartney's disappointment, the Emperor himself did not show up. On 3 October, he received a reply from Emperor Qianlong in a formal ceremony in the Palace. The reply confirmed his worst fear that the request for a Resident Minister in Peking was not granted. Knowing that it would be futile to insist on his first request, Macartney sought the approval of the Emperor to lift some of the trading restrictions to the English traders. The second letter was again unconditionally rejected. The first British envoy to China was thus dismissed.

Portrait of Emperor Qianlong

Portrait of Emperor Qianlong. By William Alexander. [WD 961, f.56

A second mission led by Lord Amherst went to China in 1816 and, like its predecessor, returned without any agreement with the Chinese government.

Meanwhile, the China trade flourished despite the failure of governmental efforts to remove the administrative restrictions. In the 18th century, the Company traded British woollens and Indian cottons for Chinese tea, porcelain, and silk. Tea imports soon became the largest single item in Britain's trading account. Conversely, the export to China of British and Indian goods began to decline and trade imbalance between Britain and China occurred as a result. The shortage of silver to pay for the tea imports forced the British to seek other commodities to compensate for the loss and to bring in profit. They discovered opium, a highly lucrative commodity. Although never directly involved in the sale of opium, which was banned in China by Imperial edict of 1729 as an illegal drug, the East India Company was responsible for most of its production in India, mainly for its medicinal value. The actual business of selling opium was conducted through private agencies.

Sale room in the India House

India House, the sale room. [P1571]

In 1833, the jealously-protected monopoly of the East India Company was finally abolished and the China trade was opened to the competition of dozens of British companies, who had been petitioning the government and lobbying members of Parliament for free trade for years.

Not long after the end of monopoly of the East India Company, it became evident that opium traffic had turned into the sole profitable business for some British companies in southern China. By 1830s, opium flooded the entire black market in China and, inevitably, became a major cause of concern for the Chinese Government. A Chinese official in Canton, Commissioner Lin, ordered the confiscation of some 20,000 chests of opium from English ships and refused to pay indemnity to the British traders. This incident outraged the British and triggered the first Opium War in 1840. This lasted two years and resulted in a treaty which caused Hong Kong to be ceded to the British Crown for 150 years and five Chinese ports, Canton, Amoy, Foochow, Ningpo and Shanghai to be opened to foreign traders.

Bibliography

Morse, H.B. Chronicles of the East India Company trading to China, 1635-1834. (Clarendon, 1926)

Greenberg, M. British Trade and the the opening of China 1800-42. (Cambridge University Press, 1951)