Trade Imbalance Between China And China

1674 WordsJan 29, 20167 Pages
In the 18th century, Chinese goods such as silk and porcelain were much desired by European and had a huge demand in the Western market. In England, tea was the most desired Chinese good and trade in tea was very lucrative. However, this created a trade imbalance because Western goods had no market in China. China was a self-sustaining country and that make it harder for Western merchant to trade with them. Apart from that, the merchants had a hard time getting into Chinese market and had to deal through Chinese middlemen in Canton. At this point, the British money had moved on from silver, but the Chinese were still using silver currency. In order to trade with the Chinese, the British first had to buy silver for other countries and then purchase the tea for a high price from the middlemen due to high taxation. This directly created a huge trade deficit for the British. The British saw opium as a solution for their trading problem. The British grew opium in abundance in India and saw it as the perfect trade item for Chinese tea. There were three different kinds of opium, ‘black earth,’ ‘white skin,’ and ‘red skin.’ The usage of opium existed in Chinese long before the British East India Company started shipping them into Chinese in large quantities. However, opium usage increased in fivefold by the late 1830s. The Chinese government moved to ban the opium trade. The British, however, started using smugglers to bypass the authority and even bribed Chinese officials to

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