UNIVERSITY OF CALCUTTA
SHRI SHIKHAYANTAN COLLEGE
TERM PAPER
HISTORY HONOURS, D.S.E B 1
SEMESTER 5, 2023
TOPIC: THE CANTON SYSTEM OF TRAE IN CHINA
Name: Anuska Pathak
Department: History
College Roll No: BA 272
University Roll No: 212034-11-0120
Registration No: 034-1211-0132-21
Year: 2023
INTRODUCTION
The Canton System, a defining feature of China's foreign trade during the Qing Dynasty, offers a
compelling historical narrative of control, regulation, and its ultimate impact on China's
engagement with the world. Spanning the 18th and 19th centuries, the system was a response to
the Qing Dynasty's conservatism, with its emphasis on self-sufficiency and its determination to
minimize foreign influence. This comprehensive exploration of the Canton System will provide
an in-depth analysis of its historical context, the intricacies of the Cohong system, the rigorous
trade regulations imposed, the controversial opium trade, its gradual erosion under foreign
pressure, and the enduring legacy it has left on China's approach to international commerce and
diplomacy.
Historical Context:
The establishment of the Canton System during the Qing Dynasty, which ruled China from 1644
to 1912, was rooted in the dynasty's self-reliance and its cautious approach to foreign
interactions. A highly centralized imperial system characterized the Qing Dynasty, and its
commitment to maintaining China's self-sufficiency paved the way for the development of the
Canton System. The dynasty's emphasis on sovereignty and control over foreign relations played
a pivotal role in shaping this complex trade framework.
The Cohong System:
Central to the Canton System was the Cohong, a carefully selected group of Chinese merchants
whom the Qing government granted authority to act as intermediaries between foreign traders
and Chinese officials. These Cohong merchants held critical roles in overseeing and regulating
foreign trade, ensuring adherence to Chinese laws and regulations, and contributing to
controlling trade relations. The Cohong system operated on a hierarchical structure, with senior
merchants wielding greater influence and authority. In addition to their intermediary functions,
these merchants were responsible for collecting various fees and taxes on behalf of the Qing
government, making them indispensable in maintaining governmental control over trade and
revenue generation.
Strict Regulations and Trade Restrictions:
The Canton System was characterized by a complex web of regulations and trade restrictions that
significantly impacted foreign traders: (a) Limited Trading Season: Foreign trade was confined
to specific seasons, typically from autumn to early winter. This seasonal limitation allowed
Chinese authorities to maintain control over the timing and volume of trade, effectively
minimizing the foreign presence in the country. (b) Limited Goods: A stringent selection of
goods was permitted for import and export, with a strong focus on high-demand Chinese
products like tea, silk, porcelain, and select textiles. Prohibited items, such as opium, were
strictly banned to safeguard China's economic interests. (c) Fixed Prices: The Chinese
government played an active role in setting and controlling prices for goods, often leading to
disputes and conflicts between foreign traders and Chinese authorities. Fixed pricing was
intended to prevent foreign traders from manipulating the market and taking advantage of the
situation. (d) Payment of Duties: Foreign merchants were subjected to various customs duties
and fees, further adding to the cost of conducting business in China. These fees were a
substantial source of revenue for the Qing Dynasty, making foreign trade a lucrative economic
activity for the government. (e) Restricted Contact: Foreign traders were confined to designated
areas in Guangzhou known as "factories." These fortified compounds were guarded and locked
at night to prevent contact between foreign traders and the local Chinese population.
Furthermore, foreign traders were prohibited from traveling beyond Guangzhou or learning the
Chinese language. These strict measures were implemented to minimize the influence of foreign
ideas and culture on the Chinese population. (f) Controlled Shipping: Regulations dictated the
size and type of ships foreign traders could use for their journeys to China. Foreign ships were
also required to return to their home countries upon completing their trade, which further
restricted their mobility and their ability to establish a permanent presence in China.
The Opium Trade:
Under the growing pressure for trade, the purchases made by British and American firms in Canton were
multiplying. The Westerners were increasingly anxious to balance their trade with China. They did not
want to go on paying for goods with silver, but the Chinese showed almost no interest in Western
products because their output was so varied. The economic bind led the British and American merchants
into the large-scale smuggling of opium, a product, that was forbidden in China except for medicinal use.
The British Hong, or companies that were authorized to operate in Canton (such as Dent and Company
and Jardine and Matheson), bought opium in Bengal, where it was produced cheaply by the subjects of
the British East India Company; the American Hong bought it in Turkey. In this sense, the opium trade
was an unhealthy extension of what in the eighteenth century had been known as the " country" trade .
Between 1820 and 1835 opium smuggling developed all along the South China coast:
No. of years No. of crates smuggled
1820-1825 9,708 crates per year
1825-1830 18,712 crates per year
1830-1935 33,445 crates per year
Jean Chesneaux in his book China from the Opium Wars to the 1911 Revolution opinionated that
the pressure exerted by the British to open China, and the increase in opium smuggling between
1835 and 1838, raised issues that the Chinese tried to approach traditionally. Since the classic
Western distinction between domestic and foreign affairs did not exist in China, the imperial
authorities still refused to treat the Westerners as foreign nationals. In his diary, Lin Zexu, one of
the chief figures behind the Chinese resistance to foreign demands, constantly referred to the
British as "rebels." In his view, their activities in Canton disturbed the established order and
upset the harmony of political and social relations. He and other Chinese authorities believed that
harmony should be restored by eliminating the causes of the disorder, not by negotiating with the
"red-haired barbarians" on a diplomatic basis.
Meanwhile, opium smuggling had become an ever-expanding threat to the equilibrium of
Chinese society. The volume of this trade suddenly increased in the period 1830-1835 and
increased again when the monopoly of the British East India Company in the Far East was
brought to an end.
Lin Ze-xu in Canton:
Lin Ze-xu, a strict Confucian who had played an active part in the controversy, was sent to
Canton as a special commissioner to see that the new rules were applied. Lin belonged to the
group of scholars (described in Chapter 2) who were interested in contemporary affairs and in
Western science and techniques, particularly geography and military strategy. Although not a
narrow-minded traditionalist, he was a man of principle who favored taking severe measures
against Western traders. In Canton Lin came into violent conflict with the British which resulted
in the military expeditions known as the first Opium War (1839-1842). The measures he took
when he arrived in the spring of 1839 were aimed just as much at the Chinese accomplices and
clients of the foreign firms as at the firms themselves. In two months he made 1,600 arrests and
confiscated 11,000 pounds of opium—actions which emphasize once more that from the Chinese
point of view, the crisis leading up to the Opium War was a question of domestic policy, if not a
simple police matter. He conducted a great ceremony of ritual expiation in June when, after
forcing the foreign factories to hand over about 20,000 crates of opium, he had them destroyed
and their ashes scattered over the sea. It was when Lin gave the order that Canton should be
closed completely to foreign trade that Britain opened hostilities. The fighting began in the South
and then moved to the region near the mouth of the Yangzi, where the British overcame the
imperial troops with ease
Decline and Abolition:
The gradual decline of the Canton System was a multifaceted process influenced by mounting
pressure from foreign powers, most notably Britain. The signing of the Treaty of Nanking
following the First Opium War marked a pivotal turning point. This treaty effectively dismantled
key components of the Canton System, including the exclusivity of Guangzhou as the sole
foreign trading port. It also opened several additional Chinese ports to foreign trade, thereby
reducing Guangzhou's monopoly on foreign commerce. Subsequent treaties further weakened the
system's influence.
Conclusion:
The Canton System, with its intricate network of regulations and trade practices, played a
defining role in China's foreign trade with European and other foreign powers during the Qing
Dynasty. Its rigorous regulations, the crucial role of the Cohong merchants, and the controversies
surrounding the opium trade are indicative of its significance. The gradual decline of the Canton
System under foreign pressure ushered in a new era for China, marked by the opening of
additional Chinese ports to foreign trade, and its legacy continues to shape China's approach to
international commerce and diplomacy.
BIBLIOGRAPHY
Prof. Amit Bhattacharya (2007), Transformation of China 1840- 1969, Published-
Archana Das & Subrata Das.
