Canton System

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The Canton System (1760-1842) served as a means for China to control trade within its own country. Despite Chinese efforts to keep European traders and citizens within the area of Macao, European trade spread throughout China and threatened to virtually take over the country through the practice of Sphere of Influence imperialism. The Canton System limited the ports to which the British traders could bring in goods to China. It also forbade any direct trading between British merchants and Chinese civilians; instead, the British merchants had to trade with the Chinese merchants--known as 'Hong' merchants specially designated to act as middlemen between the foreign merchants (whose presence was restricted to specific designated 'factories' on the harbour of Canton) and the chinese officials. These hong merchants would then sell those goods to the Chinese people.

The first trade that existed with China was for silks, porcelain ("fine china") and most lucratively tea. It was the incredible financial deficit caused by the european demand for tea that spurred the British to begin importing opium (grown in its colonies in India)--essentially the only commodity that the chinese merchants would accept besides silver specie.

Despite Britain's growing apprehension with the Canton System, the selling of opium appeased British resentment for the system, and it remained intact until the Opium Wars, which established "treaty ports" in accordance with the Treaty of Nanging, which were ruled not by Chinese laws but rather the laws of the specific country that controlled each port. Britain got their opium from their colony India.