Trade Triangle and the First Opium War

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Most of the opium came from India (Patna and later also from the Malwa region), some from Persia, and, towards the last, some Turkish opium was imported by the Americans. In 1767, the annual import of opium from India was 1000 chests. From 1800 to 1821, the average was about 4500 chests a year, but the annual total grew to some 10,000 chests by 1830 and over 40,000 chests by 1838-39. By then, the balance of trade had become unfavorable to China and the value of opium imported alone exceeded that of all the commodities exported. The increase in importation was also indicative of an increasing number of users. Because of its widespread use, opium plagued the lives of many different people from a variety of professions and social statuses.

The biggest economic impact of the opium trade was the drain of silver from China to Britain. Probably more than anything else, it made the country’s balance of trade unfavorable for the first time in its history and it started to create an economic crisis. The lack of silver resulted in a monetary crisis that decreased the wealth of China as a whole. This shift occurred at an alarmingly rapid rate, and from the years 1828 to 1836. This imposed hardship at all levels of society – peasants had to pay more as taxes, merchants charged more for their sales, official tax collectors meeting their quotas in silver had less copper cash left over as private squeeze and overall government revenue declined. This trade imbalance was unsustainable for China.

Faced with such a problem, the Chinese government opened a debate among Manchus and senior officials. The debate lasted for about two years and in the end, a minority group which favored an uncompromising and even stricter stand against Opium trade was adopted. In 1839, an imperial statute in 39 articles levied extreme punishments (including death penalty) both for trading in and consumption of opium. The imperial government appointed a High Commissioner to Canton on March 10th 1839 to suppress opium trade, Lin Tse-hsu. Lin started confiscating smuggled opium and arresting large numbers of opium dealers. Historians estimate that the Lin had confiscated over 20,000 chests of opium by the end of May 1839, more than two-thirds of the annual import at that time. He burned the Opium in a public demonstration and scattered the ashes across the sea. When Lin gave the order that Canton should be completely closed to foreign trade, the British opened hostilities and started the Opium War in November, 1839.

The first Opium War ended in 1842 with the Treaty of Nanjing, which in reality only served to exploit China for economic gain even further. The series of unequal treaties that followed the first Opium War left the Chinese powerless against the exploitation of the British and the destruction that they would bring.

Thus the trade triangle becomes an integral part of Tan Chung’s argument for the “Opium War Theory.” According to this view, Anglo-Chinese conflict was inevitable due to the addictive drug, opium and its serious repercussions on Chinese economy, society and polity. Tan Chung says that the cheap and abundant availability of opium in India and the huge profits accrued by British merchants in the trade with China helped to keep it alive. He says that Britain had already achieved a balance of trade by introducing Indian cotton in China in the 1780s. The main issue then was to tilt this trade in Britain's favour. This could be, and was, achieved by opium alone. It was their obstinacy to continue this trade even after Chinese attempts to stop it that led to war.