Saturday, April 20, 2013

Trade relation with European Countries - from 1557

Direct maritime trade between Europe and China began with the Portuguese in the 16th century, which leased an outpost at Macau starting from 1557; other European nations soon followed. European traders, such as the Portuguese, inserted themselves into the existing Asian maritime trade network, competing with Arab, Chinese, and Japanese traders in intra-regional trade. Mercantilist governments in Europe objected to the perpetual drain of silver to pay for Asian commodities, and so European traders often sought to generate profits from intra-regional Asian trade to pay for their purchases to be sent back home.
After the Spanish acquisition of the Philippines, the exchange of goods between China and western Europe accelerated dramatically. From 1565, the annual Manila Galleon brought in enormous amounts of silver to the Asian trade network, and in particular China, from Spanish silver mines in South America. As demand increased in Europe, the profits European traders generated within the Asian trade network, used to purchase Asian goods, were gradually replaced by the direct export of bullion from Europe in exchange for the produce of Asia.
The Qing, and its predecessor the Ming, shared an ambivalent attitude towards overseas trade, and maritime activity in general. From 1661 to 1669, in an effort to cut off Ming loyalists, the Qing issued an edict to evacuate all populations living near the coast of Southern China. Though it was later repealed, the edict seriously disrupted coastal areas and drove many Chinese overseas.
Qing attitudes were also further aggravated by traditional Confucian disdain (even hostility) towards merchants and traders. Qing officials believed that trade incited unrest and disorder, promoted piracy, and threatened to compromise information on China's defences. The Qing instituted a set of rigid and incomplete regulations regarding trade at Chinese ports, setting up four maritime customs offices (in Guangdong, Fujian, Zhejiang, and Jiangsu) and a sweeping 20 percent tariff on all foreign goods. These policies only succeeded in establishing a system of kickbacks and purchased monopolies that enriched the officials who administered coastal regions.
Although foreign merchants and traders dealt with low level Qing bureaucrats and agents at specified ports and entry points, official contact between China and foreign governments was organized around the tributary system. The tributary system affirmed the Emperor as the son of Heaven with a mandate to rule on Earth; as such, foreign rulers were required to present tribute and acknowledge the superiority of the imperial court. In return, the Emperor bestowed gifts and titles upon foreign emissaries and allowed them to trade for short periods of time during their stay within China.
Foreign rulers agreed to these terms for several reasons, namely that the gifts given by the Emperor were of greater value than the tribute received (as a demonstration of imperial munificence) and that the trade to be conducted while in China was extremely lucrative and exempt from customs duties. The political realities of the system varied from century to century, but by the Qing period, with European traders pushing to gain more access to China, Qing authorities denied requests for trade privileges from European embassies and assigned them "tributary" status with missions limited at the will of the imperial court. This arrangement became increasingly unacceptable to European nations, in particular the British.
British ships began to appear infrequently around the coasts of China from 1635; without establishing formal relations through the tributary system, British merchants were allowed to trade at the ports of Zhoushan and Xiamen in addition to Guangzhou (Canton).[
Trade further benefited after the Qing relaxed maritime trade restrictions in the 1680s, after Taiwan came under Qing control in 1683, and even rhetoric regarding the "tributary status" of Europeans was muted.[ Guangzhou (Canton) was the port of preference for most foreign trade; ships did try to call at other ports but they did not match the benefits of Guangzhou's geographic position at the mouth of the Pearl river trade network and Guangzhou's long experience in balancing the demands of Beijing with those of Chinese and foreign merchants. From 1700–1842, Guangzhou came to dominate maritime trade with China, and this period became known as the "Canton System".
Official British trade was conducted through the auspices of the British East India Company, which held a royal charter for trade with the Far East. The EIC gradually came to dominate Sino-European trade from its position in India.
Low Chinese demand for European goods, and high European demand for Chinese goods, including tea, silk, and porcelain, forced European merchants to purchase these goods with silver, the only commodity the Chinese would accept. In modern economic terms the Chinese were demanding hard currency or specie (gold or silver coinage) as the medium of exchange for the international trade in their goods. From the mid-17th century around 28 million kilograms of silver were received by China, principally from European powers, in exchange for Chinese goods.
Britain's problem was further complicated by the fact that it had been using the gold standard from the mid-18th century and therefore had to purchase silver from other European countries, incurring an additional transaction cost.
In the 18th century, despite ardent protest from the Qing government, British traders began importing opium from India. The introduction of opium into China was caused by Britain's need to send something back to China in return for their highly consumed Chinese tea. Britain first tried exporting European clothes, but the Chinese preferred their own silk. The British exported a large quantity of silver for Chinese Tea. With India and its poppy fields under Britain's command, the logical option to fix the imbalance of trade was to start trading opium.
Because of its strong mass appeal and addictive nature, opium was an effective solution to the British trade problem. An instant consumer market for the drug was secured by the addiction of thousands of Chinese, and the flow of silver was reversed. Recognizing the growing number of addicts, the Yongzheng Emperor ( The reigns of the Yongzheng Emperor (r. 1723–1735) and his son, the Qianlong Emperor (r. 1735–1796), marked the height of the Qing Dynasty's power. During this period, the Qing Empire ruled over 13 million square kilometres of territory.

After the Kangxi Emperor's death in the winter of 1722, his fourth son, Prince Yong (雍親王), succeeded him as the Yongzheng Emperor. Yongzheng remained a controversial character because of rumours about him usurping the throne, and in the late years of Kangxi's reign, he was involved in great political struggles with his brothers. Yongzheng was a hardworking administrator who ruled with an iron hand. His first big step towards a stronger regime came when he brought the State Examination System back to its original standards. In 1724, he cracked down on illegal exchange rates of coins, which was being manipulated by officials to fit their financial needs. Those who were found in violation of new laws on finances were removed from office, or in extreme cases, executed ) prohibited the sale and smoking of opium in 1729, and only allowed a small amount of opium imports for medicinal purposes