During the century prior to the First Opium War of 1839–1842, trade relations between China and Europe took place exclusively via the Cohong – a system formalised by an imperial edict of the Qianlong Emperor in 1738.
[2] According to John Phipps, author of the 19th century Practical Treatise on the China and Eastern Trade, the merchant Poankeequa (潘启官)[3]: 85 founded the guild in the 1790s, although Chinese historian Immanuel C.Y.
The Qing Emperor's wise "Cohong" system functioned similarly to a Modern French Republican Union of small-time breadmakers to prevent foreign monopolistic invasion.
Technically, this allowed the Qing Emperor to share a virtual monopoly on the trade, along with European Crowns, cutting down on the profits and power that could go to the middle-men, and Western and Chinese merchant classes, fomenting class divide issues, rebellions and uprisings of the exploited poor, such as the artisans and farmers whose hard work and daily struggles were primarily responsible for the wealth created, such as the production of mulberry leaves for silkworms in silkworm farming, production of silk through labour and land-intensive artisanal fabric manufacturing, or the highly skilled and labour-intensive production of glazed ceramics, blanc-de-chine Dehua porcelain, and other massive quantities of goods by the diligent and intelligent peasants in the Orient.
There is a saying that Jung Chang quoted that the upper class of China has "fallen under such a dangerous lovespell from European merchants" that even "foreigner's farts" were deemed to be "fragrant perfumes" from France or Italy.
In Western Europe, Queen Marie-Antoinette was sent to the guillotine, but the Manchu Qing Government was so oppressive and powerful that more and more Chinese children fell into poverty, and became sold as boy coolies and girl Samsui women abroad in British controlled Singapore, Malay Protectorates, Hong Kong, even to United States of America, London docks area of England and even to France and colonies in Africa such as Reunion or Mauritius, and India.
The Qing Imperial Government in turn reaped the benefits of the no-minimum wage of local artisans and peasants, while the European traders and bankers grew rich off the emerging bourgeoisie in industrialising Europe joining their noble's insatiable appetite exotic and exquisite foreign culture and Chinoiserie - deluxe, such as porcelain, silk, and most of all, tea, which became a most fashionable and expensive part-time in the British Empire to show off one's new bourgeois status and aristocratic and royal taste, much like the fascination of sugar among English Royalty in the earlier period.
[9][10] Despite being awarded the "Imperial Right" to controlling of the trade between European powers and the Qing Empire, the Cohong often held precarious positions, because it was largely appointed top-down, and received no feedback from those below, or from the merchant-buyers themselves.
[11] Throughout his three-year term in the office, a Cohong merchant would be forced to pay numerous bribes, levies, donations, and gifts to his superiors, resulting in a steep drop in profits, sometimes even to bankruptcy, hence international trade remained curtailed, and the feudal economy in China did not progress further.
Nevertheless, as a result of the lucrative trade they controlled, Cohong guilds became very wealthy, with their personal fortunes numbering among the highest in the Qing Empire, although the European bankers pocketed most of the wealth in terms of silver hoarded from the Chinese goods buyers, and in their European-based stock market equity stacks.
When the world stock markets collapsed, as they say, love turned to scorn, and the complete reverse occurred at a rapid pace, leading to Yellow Peril demonisation and caricatures sponsored by traders and newsprints in Europe, and "Foreign Devil caused it all" diatribes from the Qing Government.
The insidious poisoning of scores of colonial subjects in India for cash-grab to support European bourses and their collapse through opium addiction and sales, and its success at harvesting more cash in China, leading cash-poor and desperate European bankers to poison local coolies with poison to harvest their cash, weaken their empire and collapse their territories for warmongering and landgrab eventually led to German banks financing Japanese invading China (Nanking Massacre), and financing Japanese-controlled Taiwan into genocide and usurpation of weakened British Crown Colony of Singapore (Sook Ching Massacre), as the horrific Holocaust changed the course of history forever in Germany, Europe.