Merchants of Canton and Macao: Politics and Strategies in Eighteenth-Century Chinese Trade

Conclusion: The Limits of Commerce

The merchants of Canton and Macao were central to the rise and advancement of international trade and commerce in the eighteenth century. They were the mediators between China’s supplies of tea, porcelain and silk and foreign demands for more of those products. Demand for Chinese products in Europe, India, and later the United States, was driving the trade. Without that demand, there would be nothing to write here. The products purchased in China were mainly luxury items and tea, which meant that the trade depended heavily on foreign consumers having expendable incomes. Thus, before the China trade could begin or expand, foreign economies had to first reach a level where a substantial percentage of the population had extra money to spend. Excess foreign capital was not only essential for driving consumption but also for advancing production in China. Because the trade was very sporadic, in the early eighteenth century, with the total volume of exports rising or falling as much as 60 percent from one year to the next, investing in its expansion was very risky business. Perishable commodities such as tea and raw silk, and to a lesser extend, silk fabrics, declined in value over time. These products could lose upwards of 50 percent of their value if left over from one year to the next. If inland producers pumped out more of those products and not enough ships arrived to purchase them, there was a good chance they would be big losers. Some of these leftover products could be sold on the Chinese market, but some tea varieties and manufactured silk were made specifically for the export market and had little or no demand in China. Durable goods such as porcelain were less vulnerable to deteriorating in value over time, but that commodity depended heavily on tea consumption. Moreover, the designs that foreigners wanted on their porcelain were often much different from what Chinese consumers wanted. If tea sales declined then export porcelain sales also declined. If the items that were left unsold could not be marketed in China or Asia, then they simply had to be warehoused until another foreign ship arrived to purchase them. The uncertainty of how many buyers would arrive each year made it risky business investing in export porcelain production as well. In the 1720s and 1730s, Tan Hunqua had tried to even out some of the ups and downs of the market by pushing through reforms. He advocated the squashing or removal of practices that hindered free trade, such as corruption within the customs operation and the taxing of import silver. He promoted openness in exchanges, and he wanted Chinese merchants to enjoy the same freedoms as C O N C L U S I O N  THE LIMITS OF COMMERCE Paul_14_Conliusion.indd 213 Paul_14_Conliusion.indd 213 11年9月8日 下午2:24 11年9月8日 下午2:24 214 Merchants of Canton and Macao foreign traders. If Chinese merchants could reach into the European markets and deal directly with the companies, they could arrange sales in advance. Having the assurance of future sales would in turn encourage Chinese investors to increase output. And by dealing directly with the companies’ directors, Chinese merchants could bypass the supercargos in Canton to ensure that the latter men did not secretly undermine the trade for their own personal benefits. After all, supercargos had the freedom to overstep Hong merchants by appealing directly to the Hoppos and governor-generals in China, so why should not the Chinese have the freedom to overstep supercargos and deal directly with companies in Europe? Tan Hunqua’s ideas of openness and free trade were far ahead of his time. They went contrary to Beijing’s desires of keeping a tight rein on commerce and a short leash on foreigners. China was not ready for such openness and freedom in the eighteenth century, and only adopted some of Tan Hunqua’s ideas after it was forced to at the end of the First Opium War. Except for the removal of the 10 percent tax on import silver, which Tan Hunqua successfully negotiated in 1736, he failed to initiate any of the other changes he wanted. His imprisonment and failure discouraged others from trying to introduce similar reforms after him. The trade continued to be very unpredictable throughout the 1740s and 1750s. In some years, few ships arrived and many goods that were shipped to Canton remained unsold. These years were a great loss to merchants who had to warehouse their leftover goods...