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The Opium War and Its Background
Despite strict government regulations, foreign trade in China expanded during the late 18th century and early 19th century. As trade grew, the West found themselves to have a large and rising trade deficit with China. They were increasingly anxious to balance their trade. Yet the Chinese, having a self-sufficient econom, showed little interest in Western products. Finally, in 1820, the West found a product which China did not have, opium. Between 1829 and 1855, opium smuggling developed rapidly along China's South Coast. In 1820, 9,708 chests of opium was smuggled in per year. 15 years later, the smuggled opium rose to 35,445 chests, a growth of 400%.
In the 1830's, opium had become a vice in China. Virtually all men under 40 smoked opium. The entire army was addicted. It affected all classes of people, from rich merchants to Taoists. The total number of addicts in China in the 1830's was as high as 12 million. Due to the smuggle of opium, the trade deficit Western countries had with China quickly turned into a trade surplus. China could not export enough tea and silk to balance the trade. Instead the difference in trade was made up by the export of Chinese silver, which was highly valued for its fine qualities. In the 1835-1836 fiscal year alone, China exported 4.5 million Spanish dollars worth of silver. In 1839, the Chinese opium smokers spent 100 million taels, while the government's entire annual revenue was only 40 million taels. The drain of silver greatly weakened the Chinese government. One government official wrote, "If we continue to allow this trade to flourish, in a few dozen years, we will find ourselves not only with no soldiers to resist the enemy, but also with no money to equip the army."2
Faced with this problem, the Chinese government opened a debate among Manchus and senior officials. The debate lasted for two years, in the end, a minority group which favoured an uncompromising stand prevailed. In 1839, the emperor issued 39 articles which imposed extremely severe punishments, including death, for smoking and trading opium. Special Commissioner Lin Ze-xu was sent to Canton to ensure the rules were carried out. Lin, while in Canton, made 1,600 arrests and confiscated 11,000 pounds of opium in two months. In June, Lin forced foreign merchants to hand over 20,000 chests of opium. 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.
China, with its backward army, was overwhelmed and backed down. Commissioner Lin was recalled in disgrace and sent to exile in the Northwest. The first of the unequal treaties, the Treaty of Nanjing was signed. The Opium War, which lasted from 1840 to 1842, ended with China losing in shame.
The Opening of China
The War, although entitled "The Opium War" was in fact not about opium at all. As President John Quinay Adams said, "The seizer of a few thousand chests of opium smuggled into China by the Chinese government was no more the cause of the Opium War than the throwing overboard of the tea in the Boston harbour was the cause of North American Revolution."3 In the race to colonize the world, China represented the last prize in the Far East for European countries. The Opium War was the first step designed to open China along with its markets and resources for exploitation. The War itself physically opened China. However, it was the aftermath of the War that exposed China, economically, socially, politically and ideologically to the outside world. The unequal treaties signed after the Opium War were the primary mechanisms to open China.
- Treaties and Their Effects
The Treaty of Nanjing (August, 1842) and supplement treaties (July and October 1843) signed between the British and the Chinese were the first of the humiliating "unequal treaties". It radically increased the openings for trade in China and expanded the scope of British activities. The treaties opened five ports, Canton, Fuzhou, Xiamen, Linbou and Shanghai to conduct foreign trade as treaty ports. A war indemnity of 21 million Mexican dollars was to be paid by the Chinese government. Hong Kong was surrendered to the British, giving the British a base for further military, political and economical penetrations of China. The surrender of Hong Kong breached China's territorial integrity. The Treaty stated that all custom duties must be negotiated with other countries. It therefore took away China's control of its own customs. Furthermore, the import duties were lowered from 65% to 5%, this effectively shattered China's home industries. The Nanjing Treaty abolished the system of Gong Hang. This allowed British merchants free trade in China. The Treaty exempted British nationals from Chinese law, thus permitting the operation of extraterritorial law on Chinese soil. Furthermore, any Chinese who either dealt with the British, or lived with them or were employed by them were also exempted from Chinese law. This made foreign concessions a haven for Chinese criminals. To Chinese officials, this clause also gave foreign invaders the legal right to setup and protect their spy and criminal networks. The treaties also allowed every treaty port to have one British military ship. Thus for the first time foreign warships were allowed free entrance to Chinese waters. The Nanjing Treaty allowed British merchants to bring families to live in the treaty ports. Furthermore, it also stated that Chinese local authorities must provide housing or other foundations which British merchants could rent. The Chinese officials believed that such a system would eliminate disputes in the treaty ports, and were quite happy to agree to it. To their surprise, this system was used to establish concession areas by foreigners in the treaty ports. The Treaty of Nanjing included the so called "most favoured nation" clause. This in effect gave the British any privileges extorted from China by any other country. The "most favoured nation" clause later was extended to all the foreign countries that dealt with China, giving all Western countries that dealt with China the same rights as the British.
The Treaty of Nanjing and supplement treaties opened China to the world. China became a semi-feudal semi-colonial state. Its influences were far reaching and long lasting. However because the Treaty of Nanjing was designed to obtain free trade, its economic effects were the most severe.
- Economic Effects of the Opium War
With the abolition of the "Canton System" and the opening of the five treaty ports, foreign trade flourished. The treaty ports which lay on the South Eastern Coast of China between Shanghai and Canton, gave Western merchants access to the most developed area of China where the economy was liveliest. Western merchants mainly bought silk and tea from China. The export of tea from China increased to 42,000,000 kg in 1855 from only 7,500,000 kg in 1843, an increase of more than 500%. The export of silk rose to 56,000 bales in 1855 from 2000 bales in 1843. With the increased demand on Chinese silk and tea, the tea and silk producing regions around the treaty ports expanded and benefited from the foreign trade. More and more farmers abandoned the production of food stuffs to produce silk and tea. As a result, food prices were driven quite high. At the same time, Canton was no longer the only port for foreign trade. With the opening of five other ports, the inland boatmen and coolies, who transported goods to Canton from other areas before the Opium War, lost their lively hood. The unemployment group swelled and became increasingly poor as the price of food increased. However, freight traffic along the Chinese coast boomed. Chinese vessels joined in, and bought licence in Hong Kong. Inland traffic was replaced by offshore traffic.
The flourishing trade activities provoked a monetary crises. The sheer volume of the trade resulted in the shortage of the Spanish silver dollar. The Spanish dollar appreciated so much out of proportion that in 1853, Canton abolished it as an unit of account and introduced the Mexican dollar. The monetary disturbances brought on by the opening of China was enhanced by the internal monetary crises in China. The Chinese copper cash continued to depreciate due to poor administration and inadequate supply of copper. The monetary crises devastated the Chinese financial system. In 1853, paper money was finally issued in China.
The sector most affected by foreign trade after the Opium War would be the textile industry. For centuries, the Chinese made cloths by hand. With the rush of cheaper Western machine-made products, the home textile industry was almost eliminated. What was left adapted to survive by decreasing the price of the products. However, because the production methods remained basically unchanged, the cost of production was kept the same. Therefore the lower price came at the cost of the lower of the living standards of the textile workers. However because Chinese workers had to compete with Western machinery, fundamental changes occurred in the Chinese economy.
Even before the Opium War, a market economy was already developing in China's urban areas. The old self-sufficient economy mainly composed of petty agriculture and homestead industries was changing under pressure. Capitalism was developing in China's social-economical development. The "invasion" of foreign capitalistic powers enhanced this change. However, the coming of outside influences did not result in the independent development of capitalism in China, rather it made China into a semi-colonial semi-feudal state. This was so because Chinese industries were prematurely exposed to the outside world. They were inadequately prepared and poorly equipped to compete in the international and even domestic markets. Most exporters were small individual producers and most of their profits were taken by numerous "middle man". Western capitalism greatly changed the Chinese economy. On one hand, the opening of China undermined the basis of China's self-sufficient economy, the urban handicraft and rural homestead industries. On the other hand, it greatly enhanced the development of China's urban market economy. Such fundamental changes in the Chinese economy inevitably brought changes at the social and ideological levels.
- Social, Political and Ideological Effects
After China's disastrous defeat in the Opium War, the Chinese realized that they were no longer the "Heavenly Middle Kingdom". Lost at the hands of the "barbarians", Chinese intellectuals recognized that in order to deal with the strangers from the West, they must understand the Westerners and the place they came from. The first of such intellectuals was Commissioner Lin Ze-xu. While he was enforcing the anti-smuggling law in Canton, he collected translated materials from foreign publications and wrote a book entitled The Introduction of the Four Continents in 1840. Afterwards, Lin gave his materials to a friend, Wei Yuan, who used it and published a fifty chaptered book Maps and Introductions of Overseas Countries in 1842. This book went through a couple of editions and was finally expanded to 100 chapters in 1852. At the same time, XuJi-yu in Fuzhou wrote another book called Concise Global Introductions. This book was shorter but more accurate, especially in terms of maps.
Before the Opium War, the Chinese concept of European countries was very vague and in some cases, even preposterous. After the Opium War, China intellectually discovered the West. Western political ideas, social structures, and in some areas, technology were introduced to China. Western ideas of parliamentary democracy and capitalism were vaguely made known. International diplomacy became a concept. One of the writers, Wei Yuan, first proposed that in order to fight the West, China must learn from the West.
Wei's proposal received huge responses. After all, China lost to Westerner's "strong ships and sharp weapons". Under such circumstances, China for the first time established what was the equivalent of a foreign ministry. The foreign ministry was mainly occupied with the study of Western technology, modernization of the Chinese army and the open of modern factories. The first factories opened were for the military, and specialized in the production of modern weapons and ships. Because the products of these factories were not merchandise, making money was not a concern. The running of these factories did not depend on the profit it made, nor the demands of the market. Thus administration techniques of managing a large commercial enterprise were not yet developed.
Nevertheless, seeing that Western enterprises made a profit, the Chinese government began to establish commercial enterprises. Immediately after the Opium War, Western merchants had not yet fully penetrated the Chinese market. The Manchu government, although short in revenue, could still find enough funds to start new industries. The private sector also was quite wealthy. With the collapse of the feudalistic economy and the stimulations by Western capitalism, it was willing to invest in modern enterprises. At the same time, Western companies absorbed some Chinese capital. It could be said that shortly after the Opium War, Chinese capitalism had a good opportunity to develop.
However, the enterprises established were controlled by the feudal bureaucrats. The private sector invested, but had no say over the administration of the businesses. The bureaucrats ran the commercial enterprises as if they were running the non-profit military industries. They also used their powers to monopolize the markets, which prevented the growth of Chines private sector industries. Many new enterprises went bankrupt due to poor administration, a few that made money rarely reinvested their profits. As for the bureaucrats that ran the enterprises, they became extremely wealthy regardless of whether the company made a profit or not. However, the establishment of modern industries inevitably advanced the social-economic development of China. Attempts at forming modern enterprises, although failed, still stimulated the growth of Chinese capitalism.
The Opium War exposed the weaknesses of the Chinese feudal system. The cost of the war and later the war indemnity all fell on the shoulders of the farmers. The Manchu government could no longer protect, and govern its people. As China's economy collapsed, poverty was wide spread, insurrection sprang up all over the country. The Manchu government showed its weaknesses when it signed the Treaty of Nanjing without exhausting all possibilities of resistance. The Opium War helped to discredit the Manchu government and encouraged popular movements.
Seeing the social chaos and the weakening of the Manchu dynasty, Chinese intellectuals sought to make China strong. Unlike the government, the intellectuals believed that simply adapting Western technologies and industries was not enough, rather China must undergo political changes. They, like the officials, believed that the government should allow and protect the growth of capitalism and that the army must be modernized to fight Westerners on the battlefields. But most importantly, private enterprises should be formed without government interventions and companies must be created to compete in the market place. The intellectuals also proposed a parliamentary system. This proposal was the first attempt of private citizens to get involved in the government.
Conclusion
The Opium War was no doubt the event that opened China's doors to the outside world. Before 1842, China was closed and self isolated. The Chinese believed that their country was the "Heavenly Middle Kingdom", their emperor was the "Son of Heaven". The Opium War, in effect, shattered China's false sense of superiority. It physically forced open China, and in doing so, exposed the inadequacies of Chinese social and political structures. The Treaties signed after the war opened Chinese ports, and along with it, Chinese markets to Western capitalism. This almost entirely collapsed China's economy. However, it also forced China's economy to quickly adapt and evolve. The war speeded up China's development of capitalism.
The Opium War greatly weakened the Manchu rule, and this, coupled with a collapsed economy, resulted in swelling poverty over the country. This gave rise to social chaos and insurrections. The Opium War also caused Chinese officials and intellectuals to rethink China's social and political system. They realized that in order for China to regain its past glories, it had to learn from the West. Chinese intellectuals began to study Western countries. At the same time, the Chinese government imported Western technologies and industries. The intellectuals also proposed a new, more democratic political system.