Canton System (1760-1834):

• Established in 1760 by the Qing government, limiting all trade with Westerners to Canton.
• Features:
• Trading limited to factory settlement from October through March.
• All Chinese trading done by licensed hong merchants (the Cohong) under the Hoppo.
• All English trade channeled through the East India Company (EIC).
• Commodities: British demand for silk, porcelain, lacquerware, tea.  Frustrated by lack of Chinese interest in English goods.

• Tea native to East Asia: only found there.
• Introduced to Holland (1610) & England (1657) - as medicinal green tea.
• Increased demand after 1720 — cheaper bohea tea and expansion of sugar imports.
• Imports: 200,000 lbs. (1720) to 1 million+ (1730)
• Sugar imports:  8,176 tons (1663) to 97,000+ (1775).
• Late 18th c.: tea accounted for 80% of Canton exports, 10% of British government revenues.  Silver outflow problem.

• Opium: analgesic, narcotic, highly addicting.  Taken orally or smoked.
• Origins in China:
• Long used for medicinal purposes.
• Smoking probably began in the early 18th century, influenced by the introduction of tobacco.
• Portugese the first Western power to trade in it.
• British involvement from early 18th century.

• EIC plantations in Bengal (mid-18th century):
• High quality, quality controlled opium which it shipped in cases between 120 and 160 pounds.
• Silver flow reversed in 1820s.
•   Problems for Canton System:
• Immense profits attracted private British & American traders.
• Illegality (from 1800 on) drove it from Canton into hands of smugglers along the coast.
• Smuggling managed from guarded floating warehouse ships off the coast.
• Western complaints:
• Financial inadequacies of the hong merchants.
• Desire to expand trade beyond Canton.
• Legal problems concerning Westerners accused of crimes by the Chinese.
• Chinese complaints:
• Social problems related to spread of opium — especially when it involved upper class Chinese.
• Silver outflow and attendant inflation or copper coinage.
• Corruption linked to smuggling.

• Secured in 1834 by free trade proponents in Parliament.
• Superintendent of Trade established.
• Failed attempt by 1st superintendent, Lord Napier, to use new status to broaden relations.
• End of monopoly accompanied by exploding opium import quantities.

• Failed attempts to suppress opium trade and court debate about opium policy.
• Legalization arguments by court officials and experienced local officials: legalization would undercut corruption & reduce foreign power.
• Counter-argument by idealistic officials (many from south) for a crackdown on trade.
• 1838 edict:
• Death penalty for cultivators, distributors, consumers, and foreign importers.
• Lin Zexu (1785-1850) as special commissioner.

• March 1839 — Lin's campaign in Canton.
• Local success on consumption side.
• Ordered surrender of year's opium shipment.
• After confinement of the British traders, Sup.  Charles Elliot agreed and guaranteed repayment to the merchants.  21,306 chests turned over & destroyed.
• Lin's two letters to Queen Victoria.
• Late 1839.
• Parliament approved an expeditionary force.  War declared by Governor of India.
• Arrival of British fleet (June 1840):  16 warships (4 armed steamers) and 4,000 troops under Admiral George Elliot.
• First phase:
• Bypassed Canton, seized Dinghai & Chusan, then threatened Tianjin.
• Lin replaced by Qishan (Manchu official); fruitless negotiations in Canton.
• British naval victories led to Convention of Junbi: Eliott and Qishan agreed to:
• Cession of Hong Kong, indemnity, diplomatic relationships, reopening Canton.
• Disavowed by Chinese & and later by British.
• Second phase:
• British victories in Canton waters and seige of Canton — withdrawn after ransom of $6 million Mexican (February-May, 1841).
• Sanyuanli Incident (May 29).
• Replacement of Elliot by Sir Henry Pottinger (August).
• Capture of Amoy & recapture of Dinghai, Chusan.
• Yangzi offensive (spring 1842)
• Capture of Shanghai, Jinjiang, and advance to Nanjing.
• Peace agreement and Treaty of Nanjing.

• Treaty ports: Canton, Amoy (Xiamen), Fuzhou, Ningbo, Shanghai.
• Cession of Hong Kong
• Indemnity for opium ($6 million Mexican) and war ($12 million).
• Abolition of Cohong and Chinese payment of Cohong debts ($3 million).
• Reduced tariffs.
• Release of British prisoners held by Chinese and amnesty for Chinese who had served the British.
• Equality of the two nations.
• Extraterritoriality for British subjects.

• Demonstration of British military strength and Chinese weakness.
• First of unequal treaties and beginning of Western imperialism in China (treaty port imperialism).
• Challenge to the viability of the Qing dynasty. In Chinese nationalist historiography, the beginning of the national struggle against imperialism.
• Beginning of China's modern age.