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Bad History: China’s Economic Policies and the Opium War

This is a longish post…

A long time ago, self-congratulatory citizens and academics of Western Europe and the United States would explain away the 19th-century assault on Qing Imperial sovereignty as a simple and sad story of the Emperor who said No.  Poor deluded Qianlong missed an opportunity to liberalize his trade policies and join the ‘comity of nations,’ when he dismissed the noble, upstanding diplomat MacCartney with a sniff, a wave, and a haughty letter to His Royal Majesty King George III boasting that, “Our Celestial Empire possesses all things in prolific abundance and lacks no product within its own borders. There was therefore no need to import the manufactures of outside barbarians in exchange for our own products.”

In other words, it was the Qing imperial arrogance, not European expansionism, which lay at the heart of the 19th century wars between China and the West. This is, of course, utter horseshit.

The Qianlong Emperor wasn’t declaring a new policy, rather he was describing an economic reality: The Qing Empire at the end of the 18th century was a continent-sized trading network of markets and hubs, mines, farms, plantations, factories, merchants, banks, guilds, and relatively sophisticated systems of finance and credit.  International trade was flourishing through a variety of channels (very little of it as ‘tribute’) in a spiderweb of economic links which spanned from frontier trading posts in Central Asia to Chinese merchants and firms in Southeast Asia.

In such a system, European trade was a minute fraction of the overall domestic and international trade for the  Empire at the turn of the 19th century.  In his letter, the Qianlong Emperor does not reject the King’s demands because he is afraid of British goods affecting the economy of the Qing Empire, instead the Qianlong Emperor is saying he could take their trade or leave it and, as such, the Europeans would be wise not to whinge about the rules.

And this is where we turn to opium…because there’s never a bad time to do that, right?

In the mercantilist mindset of 18th century Europe, trade was a strategic competition between nascent nation-states — the goal was to have a favorable balance of trade vis-a-vis your trading partners.  Under these conditions, Europe’s commercial relationship with the Qing Empire was seen as untenable because of all the silver pouring into ‘Celestial Coffers.’  Opium provided the perfect product.  It was cheaply produced, in areas directly (or indirectly) under British control, and built its own customer base through use, abuse, and addiction.   By the time of the first Opium War in 1840, something like 1/6 of revenue for Great Britain was tied to the China trade in a trading system heavily reliant on the ability of British traders — first as licensees of the British East India Company and later in a private  capacity — to import and/or smuggle opium into South China.

But opium is only part of the story.  In the early decades of the 19th century as the Industrial Revolution changed patterns of production and exchange. Now the goal was less about balancing payments through trade in commodities but about finding markets for goods created in a system that required overproduction of manufactures.  Qing Imperial ‘intransigence’ took on a new  significance as the siren call of the “China Market” began to call to the pocketbooks of British commercial interests.

The new mantra for British wannabe China traders: “China really wants to have trade with us, but the crusty old emperor and his mandarins keep holding them back,” went this tale of woe, “If only the Chinese people knew about the joys of free trade they would buy all of our wonderful goods and satisfy our commercial interests…and if they don’t know it (or don’t want to) well, a liberal application of force might be all it takes to get them to open up and buy our stuff.”

Which brings me to Forbes Magazine.  First of all, let me say that the Beijing bureau of Forbes turns out some of the best articles and posts on China and that Gady Epstein is not only a friend of mine but also one of the most thoughtful and insightful journalists working in Beijing.  I’m assuming that nobody on this side of the Pacific saw this piece of dreck before it went online.  But as bad history goes…this is somewhere between “bathing open mouthed in camel dung” and “making a sex tape with a putrefying walrus carcass.”*

In the 16th century China was one of the leading nations of the world.  It was prosperous, economically self-sufficient and isolated.  European countries came to China to buy its tea, silks and spices and offered European industrial goods in exchange.  But, the Chinese emperor would have none of the European goods, which he outright banned.  Hence, gold and silver were the only acceptable medium of exchange.

A problem developed with this trade arrangement in that it was draining Europe of its gold and silver, i.e. its universally accepted currency.  In economic terms, this meant trade in Europe was slowing down due to a shortage of currency.

This clearly intolerable situation was remedied when the Europeans found a trade product that the Chinese people wanted, opium.  This too was banned as an import by the emperor, but as with all such illicit goods, smuggling on a massive scale occurred.  When the emperor began a serious crack down, European ships of war appeared on China’s coast to break the ban resulting in the opium wars.  Too late did the emperor discover that there were European goods he needed, modern tools of war.

Where to begin, where to begin, where to begin…how about in 1800 when, China was still one of the leading nations of the world, if not number one by any standard of ‘development.’

Then there’s the problem of “modern weapons.”  The Qianlong Emperor sent his letter in 1793, and as I wrote in an early installment of the Bad History Series:

As for the other conflicts, the Qing did have their troubles, troubles not helped by sending the same General Sun of the Vietnam debacle to handle military finances in campaigns against the gurkhas of Nepal. (This was Qianlong’s “you’re doing a heckuva job, Brownie” moment.) There is no doubt that military preparedness was at an all-time low, but lack of MODERN FIREARMS was not the problem. In fact, the Qing were able to conquer so much of Xinjiang, Tibeτ, and Mongolia in large part because they used modern cannons and firearms against people like the Zunghar Mongols who were relying on spears and bows. It was the Qing use of cannon that made them so formidable against the preceding Ming Dynasty and sent the last Ming emperors scrambling in the early 17th century to overturn their “no foreign firearm manufacturing” edict just as the forces of Nurhaci & Sons were helping themselves to everything north of the Great Wall.

It was not until the fruits of the industrial revolution began to sweep through the British military (beginning about three decades AFTER the Qianlong letter) that British technology could play a decisive role in a military encounter with the Qing. Most notably, the use of steam-powered gunships gave the British a huge tactical advantage along the Chinese coast. Of course Qianlong didn’t know about these in 1793, Robert Fulton wouldn’t launch his first steamship until ten years later. The Qianlong Emperor was an arrogant and pompous jackass at times, but let’s not fault the man because the crystal ball was broken.

Second, and really it’s more like 1C, Qianlong did not ban British (never mind foreign) goods from the Qing Empire, that’s just plain wrong.  While it’s true that European traders had to conduct their business within the context of the “Canton System,” many fortunes were made in the China trade.

Third, The Forbes article in theory is about China and the gold market, so the author feels the need to lump gold in with silver as the currencies flowing into China during the bad old days of the early 19th century.  Actually, almost all of the trade with China was conducted in silver.

In short, not only is the author’s history bad, the whole point of this ill-conceived juxtaposition of past and present is seriously flawed.

Finally, using the Opium War to harangue the current Chinese administration over trade policy is not only bad history but in bad taste.  The Qing government had every right to ban the import of opium and to set conditions by which trade was conducted within the empire.  The effects of the war, and the subsequent treaties and imperialist aggression against the Qing Empire, caused enormous and unnecessary suffering .

For a government so exasperated with the Qing Empire’s failure to see the rationality of commerce and comity between equal and sovereign nations, the British (and the Americans, and the French, and the Russians, and the Germans, and the Japanese…) seemed awfully eager to impose conditions on the Qing court that undermined the sovereignty of the Empire.

That said, the lessons of the Opium War are not without their value in understanding the current stormy climate in China’s relations with the West.   Right or wrong, the Chinese government (and, frankly, many Chinese people) feel that the constant barrage of criticism of trade, human rights, etc. coming from those same nations which a little over a century ago were still imposing — with guns ready — unequal treaties on China to be just more of the same but in a velvet glove.

Now I think many observers  can see the enormous difference between, say, an article in the Guardian supporting Liu Xiaobo and the actions of opium traders lobbying parliament into declaring war on the Qing Empire…but neither can we entirely fault the Chinese if some people see this as a distinction without a difference.   And articles like the Forbes piece do little to assuage such paranoia.


*Though still above such categories of utter atrociousness as “Sharing hygiene products with Lyndsay Lohan,” “Having your back waxed by Genghis Khan,” “The Dallas Cowboys 2010-2011 Season,” and “History as done by the Chinese State Media.”

20 Comments on Bad History: China’s Economic Policies and the Opium War

  1. Great read. And further proof of my pet theory that “academics” need to be writing in real time as they prepare their peer-reviewed tomes.


  2. That wasn’t too “longish….” I Agree with everything you say about the authors abysmal understanding of historical dates and moral relativism. However I would argue that the author has a point in that it in order to undermine the system, a shift needed to occur( moral correlation? NO, but a drastic shift nonetheless). This shift took decades to undermine the silver surplus that the Qing accumulated, as it will likewise take decades for China to undermine the use of the Dollar as the reserve currency on the world stage, especially at China’s current buying spree of gold (China only has a little more than 3% of global gold reserves compared to over 70% for America).

    Thus the author argues for America to look into that same broken crystal ball Qianlong looked into and come up with a more farsighted approach to fight inflation and thwart China’s multiple (gold, direct currency swaps, QFII’s, etc) approaches to undermining the dollar as the world’s reserve currency.

    In the end, its all about diversifying ones portfolio in order to hedge your bets. Who can disagree with that?

  3. Hi, When a you say “China was still one of the leading nations of the world, if not number one by any standard of ‘development.’” Can you give some standards of development in regards to this? Perhaps a citation? Thanks.

    – Anon

  4. In regards to history, how much of this is just plain “bad” history and how much of this is “old” history, as in the general overviews of China you get in secondary school or as part of your liberal arts degree requirements?

    The gold reference is clearly off; the Chinese, for some reason, favored silver, in part because of the heavy influx from the Spanish mines at Potosi, but how much else of the narrative represents outdated historical conventions?

  5. Her point about modern weapons is pretty accurate. Yes, the Qing had better weapons than the Zungars, but that is setting the bar pretty low. Qing military technology, and more importantly organization, was most charitably on par with non-western “gunpowder empires” of the early modern period, e.g. Persia, some of the Indian states, or the unmodernized parts of the Ottoman forces.

    The other encounters between late 18th century armies and these non-western gunpowder armies were handily won by the Westerners. I doubt the shabby Green Standard army would have performed very well against 1790s European troops. The decisive defeat of Indian armies by the British East India Company, Persians by the Russians, and the Ottomans by Westernized Egyptian troops in the same period demonstate the decisive advantage of Western arms and organization over the gunpowder empires even before steam engines and mechanized production.

    This divergence was already well in place by the time of the MacCartney letter. If the other examples of comparable conflict don’t prove it, contrast the Green Standard army, made up of very loosely organized soldiers, who worked part time at odd jobs to supplement their pay, with little training or drill, inconsistenly armed with artisinally produced weapons, against a Napoleonic or Frederick the Great era professional force. The backwardness of the Qing is pretty obvious. The divergence is even greater in the navy.

  6. Great post and a great read. Not too long.

  7. Agree with your general analysis, but I’m ‘fraid your industrial revolution history is marginally off. It had already been going in my home county of Lancashire for a good 40 years or so by the time Macartney made his visit to China, and whilst steam engines wouldn’t be given their first military application until 1815 (the first year when British soldiers were mobilized by rail), the flintlock Brown Bess was a country mile ahead of the matchlock musket of the Chinese, and the Baker rifle a good way beyond that.

    However, technological superiority does not really explain the victories of Britain and France during the Opium Wars. Both the Zulu and the Mahdists rebuffed British armies using less potent weapons than those available to the Chinese, and faced armies much better armed than those which stormed Xiamen, Guangzhou, and Beijing. Really, the relative weakness of the Chinese is only understandable from the point of view of the decrepitude and disorder of the political system prevailing at the time – wherein China was essentially ruled as a Manchu colony.

  8. Looks like your link and comment got deleted by Forbes…

  9. One forgets that England began the trade in opium. China was well within her rights to reject the drug trade. Today, all nations face a drug problem fueled by the poppy. I wonder if Afghanistan told the United States and Europe that WILL allow heroin into their countries or face a nuclear war.
    Drug cartels could use the same thesis, allow drugs into your countries or face direct attack.

    • China failed for the same reason that all other countries that have tried to legislate against drugs are failing.
      You simply cannot legislate away a highly demanded commodity without creating a gigantic black market.

      Whilst China may not have had the might to go toe-to-toe militarily with the British and their allies back then,
      I don’t doubt for a second that they had the ability to grow more opium cheaper than even British India could.

      Rather than going for the moralistic big-government route, they could quite easily have played the market against
      Britain and her allies and both satisfied their own internal demand for opium and also profited from the sale of
      opium to other south-east asian countries.

      • DaveB,

        While the idea of going directly into business against the foreigners wasn’t necessarily broached, the idea of legalization, taxation, and regulation of the opium trade was certainly being debated at court and among scholar-officials at the time. One school in particular, centered around Ruan Yuan’s Xuehai Tang in Guangdong generally opposed strict interdiction because of the economic, enforcement, and other costs that we now associate with similar attempts at other ‘prohibitions.’ Perhaps the most famous document in this regard is the memorial to the Daoguang Emperor by the official Xu Naiji questioning the wisdom of trying to ban opium imports. You can see a copy posted here.

  10. I like your article. Very straightforward.

  11. I had come to expect better than such vanilla white man’s burden from your commentary. I am no working historian, but I do know that by 1800 the Qing empire had already shot itself in the foot: the population had doubled while economy was lagging and agriculture (though high-yield compared to contemporary England) could not keep up: the poor suffered; civil servant positions were too few and widely bought, leaving more and more “scholars” struggling their whole life to make it through the imperial exams: the educated went to waste. The account you give of Qianlong’s letter is not just poppycock it is the version retained by, eg, Spence. The point is not that the man was a pompous fool with a master race complex/moral high ground who could not think ahead 30 years. The point is that with all his might and riches and throngs of Qing China’s best and brightest counsellors, it didn’t cut it past him that maybe the steam engine was a pretty useful thing. Meanwhile in “backwards Europe”, Denis Papin and others had had it all figured out long ago, things were happening like the birth of modern republics and the industrial revolution. Ironically, the crimes you blame on the English of old fit well the Chinese of today: overstaying their welcome in foreign lands by illegal immigration; smuggling forbidden goods – counterfeits, contraband; ignoring foreign laws such as IP dues; investing in military might as a means to better impose their views before 30 years will be over. When confronted with Han jingoism, I shrink into a state of forgiveness: it is Bad History as you copied out above from a CCP prep school textbook, and an excess of military marches, flagwaving and nationalist sentiment fostering that has drawn this veil over their eyes. Though it is absurd for Chinese under 96 years of age (or 61 take your pick) to bear a grudge towards foreigners, those who do should be forgiven on the grounds that their stupidity is “not their fault”. On the other hand, it would take more than a hefty check to make me spout the “egregious Eastern media bias” I read above – or did they capture your wife & kids? Sorry for the ad hominem, but I have to chose between you and Spence now.

  12. Well, certainly a bit of debate here…as most readers could probably guess, I am pretty heavily influenced by Ken Pomeranz (The Great Divergence) and other recent historical works that are, I feel, effective counters to the “narrative of failure.” Remember that rejection of this narrative is not the same as letting the Qing off the hook for major economic and political deficiencies at the time, but I do hope that we have moved away from this Qianlong=Idiot Manchu Tyrant/British=Clever Frustrated Free Traders as history their unfortunate analogues in the present day.

    About the Industrial Revolution (and FOARP’s comments about Zulus) keep in mind that the Opium Wars were primarily naval and that the key technology here was a steam-driven boat with a shallow draft that could travel swiftly against currents and into shallow waters thus making it a particularly destructive platform for the gunners. When the British went ashore (or sent Indian troops ashore) the results were decidedly mixed as in the case of Sanyuanli.

    Nevertheless, I’m glad to see my longish post was able to generate so much thought and commentary. Though I admit it’s funny to be lumped in with the China apologists, especially given all the fenqing hate mail I’ve received over the years. Probably time to write another Tibet post…

  13. “One forgets that England began the trade in opium.”
    what about Spain? (and Arabians?)

  14. Jeremiah, Jeremiah, you should know by now that you can’t possibly win. Even the hint of seeing things from the Chinese things makes you a ‘red under the bed’ commie, rice munching fenqing groupie! Nice post, btw, even if some points could have been expanded, but food for thought nonetheless!

  15. I’m sourcing Rowe’s book, “China’s Last Empire: The Great Qing”… it’s fascination because there is a lot more information available on Qing Dynasty developments than any of the previous periods. There’s probably some function somewhere which combines the sophistication of historical research, the level of documentation, and the complexity of the period which determines how much can be “known” about a historical period. The Qing Dynasty, in this function, would be at a sweet spot.

    One thing Rowe mentioned was the massive change in Western perceptions of China from the late 18th century to the early 19th century. An interesting factor he brought up was that between the late 18th century and the early 19th century, there was rapid change in the quality of the Qing administration, owing, in the traditional Chinese historiography, to Daoguang’s refusal to purge the civil service apparatus after an extremely severe incident of corruption. He was given a choice between purging the slate clean, or just punishing (executing) the figureheads and leaving the body as is– the latter involves a high risk as reconstructing the civil service after pursuing a large-scale purge would be highly taxing, but the former means that corruption in the government apparatus would essentially be untouched.

    In those 20-40 years, Western perceptions of China went from that of a rational (remember the rationalist strains in Confucian and Neo-Confucian thought, while the world is ordered by an irrationally perceivable Li, one still has the obligation to understand Li as the basis for moral action, and you can see it come to fruition with naturalistic painting in the early Song, mathematical developments cut short in part by the collusion of mathematicians with the Yuan dynasty, and Neo-Confucian Tokugawa Japan developing quasi-calculus and their own brand of economics, although I’m told there were also Wenzhounese Neo-Confucians who went pro-trade) and industrious people to one stemmed by (non-Christian) superstition and moral degeneracy.

  16. You can take from it what you will, as a parable of how you need complete regime change to save “that country” from governmental corruption, or personally, as a reflection of what has happened stateside, from the Clinton years of prosperity, to the Bush years of pseudo-prosperity, to the Obama (don’t mention who’s at fault, I agree with you, it’s Bush II) years of recession; a lot can change in 20 years, don’t you think?

  17. Inst,

    I love love love that book. I just reviewed it for an academic journal. It’s not quite as accessible to a general/undergraduate readership as the classic Spence SFMC, but I really like the way Rowe’s narrative is periodically interrupted by discussions of the debates and arguments which shape that narrative. Highly Recommended to anyone interested in Qing history.

  18. I’m wondering why you feel it’s an unaccessible text, while a general reader such as myself may jump to the wrong conclusions, it’s miscomprehendable, not incomprehensible.

    As far as your review goes, I’m always trolling for opinions on academic texts I read; they’re always incomplete, aren’t they, as only a component part of a discourse without full consideration of other viewpoints as that would greatly lengthen the text and reduce its coherency?

    I’m told that while publication rights to papers and contributions are transferred to the journal, some academics self-publish drafts of their reviews that still require minor revisions. I’m not sure what your relationship to the specific academic journal is, but it would be great if you’d publish a draft of your review.

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