China trade

After 1784 merchants from the United States carried on a lucrative China trade in products such as silk, tea, porcelain, silver, and ginseng. Although there had been some TRADE with China during the colonial era under the auspices of the British East India Company, this trade began in earnest when the ship Empress of China embarked on a long journey from New York City to Canton. The ship returned to New York in 1785 loaded with teas, silks, and porcelain from which its investors made a healthy 30 percent profit. U. S. trade with China took place through the exclusive organization called the Co-Hong or Hong merchants. The Co-Hong had a corporate monopoly granted by the Ch’ing dynasty to conduct trading operations with all foreigners. The Hong merchants also coordinated and directed various trading factories in Canton. The factories served as warehouses, offices, treasuries, and residences for foreign traders in Canton, including merchants from the United States.

Neutrality of the United States with regard to the European wars from 1790 to 1807 allowed U. S. ships to secure increased trading opportunity in China, without fear that merchant ships would be captured. By the 1790s trade between China and the United States focused mainly on a few products: silver, silks, and tea. U. S. merchants carried millions of dollars worth of silver bullion garnered in South America to China in exchange for tea and silks. In Canton, these merchants competed for the Co-Hong’s trade with merchants from various Western nations.

By far, the largest rival of the United States in the China trade was the British East India Company. The company dominated trade with China and was less dependent on silver than other Western traders. The East India Company relied more on its own trade proceeds to purchase Chinese

Teas and silks, thereby reducing its burden to provide the Hong merchants with silver. This put the other traders at a considerable disadvantage due to the expense of purchasing and transporting silver for trade in Canton.

Further reading: Yu-Kwei Cheng, Foreign Trade and Industrial Development of China (Washington D. C.: University Press of Washington, D. C., 1956); Weng Eang Chong, The Hong Merchants of Canton: Chinese Merchants in Sino-Western Trade, (Surrey, U. K.: Biddles Limited, 1997).