6.2.3 China’s Dominance in Trade

China had long been a major world power and became even stronger with the rise of the Qing (1644–1912), the last imperial dynasty. After defeating their Ming predecessors and consolidating their power, Qing rulers turned to rebuilding the Chinese economy. With a stable frontier, they were able to reduce military spending and lower tax burdens, which freed money for people to invest in businesses and for the wealthier classes to purchase luxuries. The Qing seized land from wealthy families that supported their political rivals and distributed it to other families that set up small farms. To help these new farms, the government gave the owners draft animals, tools, and seeds. Most farmers focused on growing rice in the river valleys, but the introduction of potatoes from the Americas allowed them to grow food on hilly ground that had never been widely cultivated before. Some began growing tobacco, which also came from the Americas and became a key cash crop for Chinese farmers.

To facilitate economic development, the Qing upgraded China’s infrastructure, including rebuilding roads and improving the Grand Canal. Begun in the fifth century BCE and still in use today, this waterway stretches 1,100 miles from Beijing in the north to Hangzhou in the south. It is the world’s longest canal and connects several important waterways, including the Huang (Yellow), Huai, and Yangtze Rivers (Figure 6.15). In the Qing era, the Grand Canal transported luxuries, but most importantly it brought food from the rich agricultural river valleys of the south to the large cities of northern China such as Beijing, which became major centers of commerce and manufacturing during this time.

The Qing dynasty’s leaders also focused on increasing China’s international trade. They signed new treaties with foreign nations, including the Treaty of Kyakhta (1727) with Russia, which opened China to new European markets. They also improved trading relationships with Japan, the nations of Southeast Asia, and the Philippines. The Qing government lifted most prohibitions on trade with the western nations. Under the Canton system, in place from 1759 to 1842, western Europeans were permitted to trade with China if they agreed to work through the Chinese guilds that enjoyed monopoly rights to the tea and silk trades. Under this system, all trade was confined to the southern Chinese port of Canton (Guangzhou) in order to limit contact with Europeans and foreign influence on China. Only members of the merchant guild authorized to transact business with Westerners were allowed to have contact with Europeans. All Europeans trading in China were subject to Chinese law, and they were required to live and do business in a small area outside the city walls. Europeans were not allowed to bring firearms or warships into the port, and European women were also prohibited from settling in Canton, which prevented a permanent European community from taking root there.

The Canton system successfully increased China’s trade with Europe and improved the Chinese economy. By 1833, the Chinese were exporting twenty-eight times more tea and welcoming thirteen times more foreign ships than before. Tea was the most important export, but China also exported large quantities of silk and porcelain. It rejected most European trade goods and insisted on payment for its exports in silver. Desperate for Chinese goods, Europeans complied, and several million dollars’ worth of silver flowed into China each year. As a result, China enjoyed a very favorable balance of trade with Europe. This encouraged European nations to find a way to chip away at China’s trade advantages.