Canton System

Canton, 1850

It was very stylish and a status symbol for an individual in Europe in the past to own oriental items from China. Today, almost anything is made in China. However, before the 19th century, items made from China were limited in the west, thus had high prices. One reason was the limited trade conducted between the West and China. It was due to the 18th century Canton System.

China was the jackpot of world trade during the 18th century and even before. A trader who could access the trade would have huge return from profit. Profit derived from importation to the west of some oriental goods. Silk, porcelain, lacquerware, and tea were among the most highly in demand Chinese product in the west. The British for example desired cotton cloth from Nanjing, which they called Nankeen. Chinese good were selling in high price which equivalent to high profits. 

The Age of Exploration begun because of trade with China. During the 1500’s many Europeans, through exploration, found ways to find new access to the China trade. First were the Portuguese through the Cape of Good Hope in the tip of Africa and the Spaniards through the Tierra del Fuego in South America, across the Pacific and then to the Philippines; and, started to operate the Manila-Acapulco Galleon Trade. Later the British, the French, and the Dutch found ways also to have access to China through means of East India Companies.

With Europeans have acquired access, the next problem was the openness of the Chinese emperors to trade with the west. During the reign of Emperor Kangxi (r. 1661 – 1722) in 1660’s, the whole coast of China was open to trade. However, for the sake of their convenience, the westerners made mostly of their trade activities to southern Guangzhou Province.

The Chinese saw the westerners negatively. First they saw the westerners lowly because of their high esteem and belief that China was the Chungkuo or the Middle Kingdom. They also saw them as foreign devils. One reason could be the proselytizing of Christianity to Chinese, which meant the abandonment of the traditional ancestral worship. Further reasons for low regards for the westerners was for their trading activity. In the social ranks of Confucianism, traders or merchants were seen as lowly class. These were the reason for Chinese pessimism to foreigners.

Due to religious and political circumstances, in 1757, under the command of Emperor Qianlong (r. 1735 - 1796), all western trade with China would be confined to the port of Canton in Guangzhou Province. The Canton System was enacted. The policy was similar to the Dejima Island scheme of the Japanese. All foreign trade, along with their influence and there conversion to Christianity, were confined to one location. Canton, by then, was a flourishing gateway for foreign traders. It was ideal way for the Qing Government to contain the foreign influence. For the westerners, the policy was a setback; nevertheless, they favored the port they were given. Canton was strategic area for trade. It was a port in the Pearl River Delta. The Pearl River could provide access to Chinese trader to keep the flow of goods from inland China to the coast then to hands of the westerners.  

Another part of the Canton System was the Cohong (Kohong, or simply, Hong). The Cohongs were group of merchant, usually 12 to 13, which conduct trade with the westerners. The Cohongs began way to 1725. Under then Emperor Yongzheng, the numerous merchants conducting business with foreigners were to group themselves into several Cohongs. By law they were mandated to be the middle man between the government and the foreigners. They would be in charge of the lodgings of the foreigners. In addition, they must make sure that the foreigners would act appropriately. They were also allowed to collect taxes. This part of their job became the source of abuse. They would make the foreigners pay higher than the usual tax rates imposed by the Qing Government in Beijing. Lastly, in 1754, the government made the Cohongs also guarantee the ships of foreign traders arriving in Canton. Thus, they made sure that the foreigners would have what they ordered. This made them also known as security merchants. Cohongs faced financial trouble in 1771. Many cohongs either evaded remitting taxes to the Hoppo or faced financial bankruptcy. And so many closed down and never operated until 1782 when they were once again operated to lend money to the foreigners rather that the government to do the service.

However, the Cohongs did not held all the power. The Hoppo was a government institution made responsible by the government to oversee as well the Canton System. They were in charge of making sure that the foreigners would not leave the island. Also, they were the once collecting the taxes which the cohong collected. Hoppo was made answerable to the government in Beijing and the governor in charge of the province of Guangzhou.

In Canton, the foreigners faced a lot of prohibitions. Foreigners were allowed in Canton for a limited time from October to March. After which they were to stay in the Portuguese occupied Macao. They were not allowed to sell weapons in China. The westerners were also barred from bringing their family to Canton. They were also banned from learning the Chinese language, a tactic probably meant to discourage trade. They were allowed only to stay in Canton. And within the city, they built factories or offices for their agents, which were called factors. The Thirteen Factories Street became the center the headquarters for Europeans. But for the Chinese they called it Barbarian Houses.

The Canton System made the trade between the Chinese and the Europeans difficult. Europeans tried to lighten trade relations with China. In 1793, the British sent George Macartney to the court of Emperor Qianlong in Beijing. The Macartney embassy failed to attain their objectives.

The end of the Canton System only transpired almost a century after it began. The Opium War humiliated China tremendously. China faced a modern and well trained army of the British Empire. The war ended when the two parties signed the Treaty of Nanjing in 1842. Under the treaty, the Canton system was to be abandoned in favor of opening 11 more ports for free trade with the British.

The Canton System was failure in part of the Chinese. Instead of deterring the influence of the Europeans to China, it exacerbated it. The British for example became obsessed with trade with China and looked for ways to break it. Eventually, Britain found one, in form of the Opium War. The end of the Canton System eventually would mark the decline of the dynasty that imposed it.

See also:
Cohongs
Dejima Island
Thirteen Factories

Bibliography:
Dillon, M. China: A Modern History. New York: I.B. Tauris & Co. Ltd., 2012.

Perkins, D. Encyclopedia of China: The Essential Reference to China, Its History and Culture. New York: Routledge, 2013. 

Tamura, E. et. al. China: Understanding its Past. Hawaii: University of Hawaii Press, 1997.

Rowe, W. China’s Last Empire: The Great Qing. Massachusetts: Harvard University Press, 2009.