Friday, August 1, 2014

Cohongs: Domination of Trade

The Thirteen Factories (1825)
China’s rulers were anxious about the proselytizing of the Christians in its ports. In the mid 1700’s, the Manchu Qing government decreed that all foreign trade of China would only pass to the ports of the southern city of Canton. And in Canton, only few were allowed to transact with the outsiders. Those who were only allowed to mingle with the western traders were called Cohongs (Kohongs or simply Hongs). They would serve as intermediary between Beijing and the Europeans.

China was the golden goose for many western traders. Many were willing to invest large amount of capital just to have a journey to trade with China. Exotic and oriental goods from China valued highly in the markets of Europe. Nations launched expeditions to find new routes to get to the Middle Kingdom. The British, French, Spanish, and Dutch were just among those who sought trade with China.

China, however, were hesitant of the foreigners. They deemed them lowly and dangerously. Their trade activity caused them to be seen as low class by the Chinese. On the Confucian social strata, traders were on the lowest part. Furthermore, the Chinese also saw them as threat to their identity and traditions. The Christian missionaries brought by the Europeans became the reason for many of the Chinese converts to turn away from the old tradition of ancestral worship. Moreover, it also drove away Chinese converts away from traditional festivities. The government saw this as well and decided to act against them.

They decided to isolate the whole Empire with one port only open to the foreigners. During the reign of Emperor Kangxi, the foreigners were only allowed to the coastlines of the Empire. But when the new Emperor came to power it changed. Emperor Qianlong limited all foreign trade activity only to the port of Canton. And there, the business of the foreigners were further limited.

The government limited business transaction to a number of groups of merchants called Cohongs. Cohongs were an organization of merchants specialized in trading with the Europeans. The Cohongs meant authorized firms in Cantonese. But in Mandarin Pinyin Romanization, they were known as Gohangs. The Cohangs began in 1720 during the reign of Emperor Yongzheng. During the start of the Canton System under the reign of Emperor Qianlong, there thirteen permitted Cohongs. The Cohongs may increase in number depending on profitability. In 1720, there were 16 Cohongs operating. No merchants outside the cohongs were allowed to do business with the foreigners. The Cohongs had the virtual monopoly. In order for a cohong to join, they must pay a thousand taels. The most prominent cohongs were the following:  Mowqua, Puankhequa, Goqua, Futqua, Kingqua, Sunshing, Mingqua, Saoqua, Punhoqua, Howqua. The most prominent and richest of all was Howqua. He began his Cohong in mid-1700s and continued until its end in 1842.

The Cohongs were given a huge responsibility by the Chinese government. They served as representatives of the Qing government to the foreign merchants. They were to police them and make sure they act according to the law of the land. They were also responsible in collecting customs duties from the incoming foreign ships. And these taxes were to be remitted to the officials directly appointed from Beijing known as Hoppo.

The Cohongs were also to entertain the foreign traders. They rent them the Thirteen Factories. The Factories or malfactories were to serve as temporary offices of foreign agents during the trading season, which was between September and March. They had the privilege to buy and sell goods to the Europeans. Porcelain, lacquerware, camphor wood, and many more Chinese goods were being sold to the outsiders.

The Cohongs faced many problems during their operations. In 1771, they were disbanded for charges of tax evasion. And so the foreign traders began to operate and borrow money directly from Chinese traders. The government wanted to discontinue and prohibit it and so the cohongs were reinstated in 1782. In 1793, the Macartney Embassy wished to end the monopoly of the cohongs along with the Canton System. Emperor Qianlong, however, denied their request.

The British did not lose hope to open up China and find new markets for their goods. By the 1830’s Britain had found a way to increase their exports to China. They found opium to be very popular and profitable in China. But the opium addiction in China alarmed the Qing government and Emperor Daoguang was made to act. Lin Zexu was appointed to halt the destructive trade in Canton. Lin blamed the Cohongs for the spread of such dangerous drugs. And so he threatened to execute some Cohong if they failed to comply with the government. They had no choice but to surrender their opium. It eventually led to the Opium War in 1839. And in 1842, the Qing was humiliatingly defeated. It then signed an unequal treaty with Britain opening up 11 ports for trade. It ended the monopoly of both Canton and the Cohongs.

The cohongs was similar to the Canton System. It was meant to isolate and contain the foreigners from spreading their influence in China. They made sure that the foreigners were only in Canton and made sure as well that they would not mingle with other Chinese merchant. However, there business mindedness caused their downfall. With high profits from opium, they spearheaded the addiction of millions of Chinese for generations. Eventually, the same opium they helped to import led to a war that would end their dominance in the export and import trade in China.

See also:
Canton System
Dejima Island
Thirteen Factories

Carroll, J. A Concise History of Hong Kong. Maryland: Rowman & LIttlefield Publishing, Inc., 2007.

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

Dillon, M. Dictionary of Chinese History. New Jersey: Frank Cass and Company Ltd., 1979.

Gao, J. Historical Dictionary of Modern China. Maryland: Scarecrow Press Inc., 2009.

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