Old China Trade

The Old China Trade (Chinese: 舊中國貿易) refers to the early commerce between the Qing Empire and the United States under the Canton System, spanning from shortly after the end of the American Revolutionary War in 1783 to the Treaty of Wanghia in 1844.

The "Chinese Queen", as the vessel was known, under the command of Captain John Green,[3] carried a cargo of silver specie and ginseng for trade.

In Guangzhou, the Americans encountered many European nations already trading under the Canton System, including the English, Dutch, French, and Danish.

As well as symbolizing a breach of the British East India Company's tea monopoly, the successful and lucrative voyage of the Empress inspired other American merchants to follow suit with the desire to enter a new market with great potential for profit.

[9] Trade with China, originally an enterprise of seemingly limited prospects involving significant risk instead turned out to be extremely lucrative.

Transported from the interiors of Pennsylvania and Virginia to Philadelphia, New York, or Boston, ginseng was then shipped to China and sold for up to 250 times its weight in silver.

Searching for another type of item that could be sold to the Chinese aside from specie and ginseng, Americans soon found that the mandarins had a taste for sea otter pelts, which could be inexpensively purchased from the Indians of the northwest coast of the United States and shipped to Guangzhou.

The Chinese mandarins' desire for bullion, ginseng, and furs was the primary impetus for the United States' initiation of trade with China.

The return of the Empress of China, which had carried all three commodities, and her by the now rich crew to Boston in 1785 inspired other Americans to make similar voyages.

Therefore, when the Empress returned home, she brought with her a large stock of outlandish Chinese goods, which her owners sold for a significant profit of $30,000—a 25% gain.

Further motivation came from the knowledge that China, as a whole, had a mercantilist-like attitude towards foreign commerce; they tended to resist the importation of foreign goods because of a mixture of Confucian doctrine, which deprecated trade, and the underlying ethnocentrism felt by the Chinese—they did not need to actively search for trade because the inferior white "barbarian" states would instinctively bring it to them as a form of tribute.

What resulted was the flooding of Chinese teas, cotton, silks, rhubarb, cassia, nankeens (durable, yellow cloth), floor-matting, lacquerware, fans, furniture, and porcelains, into the US, to the extent that even those of poor social classes possessed some Chinese items—perhaps a painting of Guangzhou's harbor or a pair of trousers made out of nankeen cloth.

Relations between the Cohong and the foreign merchants were cordial and very peaceful, as both parties valued their reputations and had vested interests in preventing the disruption of trade.

One of the largest problems faced by foreign traders in Guangzhou was finding a reliable medium of exchange that would enable sustainable trade with the Chinese.

Specie was very expensive and difficult to acquire considering that the supply coming from South America fluctuated and it required a lot of goods to attain through a trade.

Beginning in 1767 and rapidly expanding through the early 1800s, opium was illegally traded for specie with the Chinese and then reinvested in tea for importation to Great Britain.

[10] The innovation of the British credit system and issuance of banking bills allowed the American traders to clear their debts with Cohong merchants and gradually substitute their cargoes away from carrying specie and more towards domestically manufactured items.

[11] The American trade in Guangzhou existed primarily through private traders and without the supervision and supporting authority of the United States government.

[14] At the end of the First Opium War in 1842, Britain and China signed the Treaty of Nanking, which effectively overthrew the original mercantilist system and forced open the ports of Guangzhou, Xiamen ("Amoy"), Fuzhou ("Foochow"), Ningbo ("Ningpo"), and Shanghai to British trading.

As a result, the administration of President John Tyler sent the commissioner Caleb Cushing to negotiate a treaty in which the United States would receive the same privileges as Britain.