Seeing little to gain from trade with European countries, the Qing (Manchu) emperors, who had been ruling China since 1644 (see “The Rise of the Manchus” in Chapter 21), permitted Europeans to trade only at the port of Guangzhou (Canton) and only through licensed Chinese merchants. Initially, the balance of trade was in China’s favor. Great Britain and the other Western nations used silver to pay for tea, since they had not been able to find anything the Chinese wanted to buy. By the 1820s, however, the British had found something the Chinese would buy: opium. Grown legally in British-occupied India, opium was smuggled into China, where its use and sale were illegal. Huge profits and the cravings of addicts led to rapid increases in sales, from 4,500 chests a year in 1810 to 10,000 in 1830 and 40,000 in 1838. At this point it was China that suffered a drain of silver, since it was importing more than it was exporting.

To deal with this crisis, the Chinese government dispatched Lin Zexu to Guangzhou in 1839. He dealt harshly with Chinese who purchased opium and seized the opium stores of British merchants. Lin even wrote to Queen Victoria: “Suppose there were people from another country who carried opium for sale to England and seduced your people into buying and smoking it; certainly your honorable ruler would deeply hate it and be bitterly aroused.”2 When Lin pressured the Portuguese to expel the uncooperative British from their trading post at Macao, the British settled on the barren island of Hong Kong.

Although for years the little community of foreign merchants had accepted Chinese rules, by 1839 the British, the dominant group, were ready to flex their muscles. British merchants wanted to create a market for their goods in China and get tea more cheaply by trading closer to its source in central China. They also wanted a European-style diplomatic relationship with China, with envoys and ambassadors, commercial treaties, and published tariffs. With the encouragement of their merchants in China, the British sent an expeditionary force from India with forty-two warships, many of them leased from the major opium trader, Jardine, Matheson, and Company.

With its control of the seas, the British easily shut down key Chinese ports and forced the Chinese to negotiate. Dissatisfied with the resulting agreement, the British sent a second, larger force, which took even more coastal cities, including Shanghai. This Opium War was settled at gunpoint in 1842. The resulting treaties opened five ports to international trade, fixed the tariff on imported goods at 5 percent, imposed an indemnity of 21 million ounces of silver on China to cover Britain’s war expenses, and ceded the island of Hong Kong to Britain. Through the clause on extraterritoriality, British subjects in China became answerable only to British law, even in disputes with Chinese. The treaties also had a “most-favored nation” clause, which meant that whenever one nation extracted a new privilege from China, it was extended automatically to Britain.

The treaties satisfied neither side. China continued to refuse to accept foreign diplomats at its capital in Beijing, and the expansion of trade fell far short of Western expectations. Between 1856 and 1860 Britain and France renewed hostilities with China. Seventeen thousand British and French troops occupied Beijing and set the emperor’s summer palace on fire. Another round of harsh treaties gave European merchants and missionaries greater privileges and forced the Chinese to open several more cities to foreign trade. Large areas in some of the treaty ports were leased in perpetuity to foreign powers.