Opium War

PaperDuring the 19th century, trading in goods from China was extremely lucrative for Europeans and Chinese merchants alike. Due to the Qing Dynasty's trade restrictions, whereby international trade was only allowed to take place in Canton (Guangzhou) conducted by imperially sanctioned monopolies, it became uneconomic to trade in low-value manufactured consumer products that the average Chinese could buy from the British like the Indians did. Instead, the Sino-British trade became dominated by high-value luxury items such as tea (from China to Britain) and silver (from Britain to China), to the extent that European specie metals became widely used in China. Britain had been on the gold standard since the 18th century, so it had to purchase silver from continental Europe to supply the Chinese appetite for silver, which was a costly process at a time before demonetization of silver by Germany in the 1870s. In casting about for other possible commodities, the British soon discovered opium, and production of the commodity was subsidized in British India. Between 1821 and 1837 imports of the drug to China increased fivefold, as the demand for the equalizing of the trade balance reversed a previous decision by the British authorities to respect the Qing government ban on the drug, dating from 1729. British importation of opium in large amounts began in 1781. The drug was produced in India under a British government monopoly (Bengal) and in the Princely states (Malwa) and was sold on the condition that it be shipped by British traders to China.

Alarmed by the reverse in silver flow and the epidemic of addiction (an estimated 2 million Chinese were habitual users[1]), the Qing government attempted to end the opium trade however its efforts were complicated by corrupt local officials (including the Viceroy of Canton). In one isolated incident, in 1818, the Laurel carried word to Sydney of a US ship laden with opium and treasure