Which company was dealing with opium and how?

Opium was first introduced to China by Turkish and Arab traders in the late 6th or early 7th century ce. Taken orally to relieve tension and pain, the drug was used in limited quantities until the 17th century. At that point, the practice of smoking tobacco spread from North America to China, and opium smoking soon became popular throughout the country. Opium addiction increased, and opium importations grew rapidly during the first century of the Qing dynasty (1644–1911/12). By 1729 it had become such a problem that the Yongzheng emperor (ruled 1722–35) prohibited the sale and smoking of opium. That failed to hamper the trade, and in 1796 the Jiaqing emperor outlawed opium importation and cultivation. In spite of such decrees, however, the opium trade continued to flourish.

Early in the 18th century the Portuguese found that they could import opium from India and sell it in China at a considerable profit. By 1773 the British had discovered the trade, and that year they became the leading suppliers of the Chinese market. The British East India Company established a monopoly on opium cultivation in the Indian province of Bengal, where they developed a method of growing opium poppies cheaply and abundantly. Other Western countries also joined in the trade, including the United States, which dealt in Turkish as well as Indian opium.

Britain and other European countries undertook the opium trade because of their chronic trade imbalance with China. There was tremendous demand in Europe for Chinese tea, silks, and porcelain pottery, but there was correspondingly little demand in China for Europe’s manufactured goods and other trade items. Consequently, Europeans had to pay for Chinese products with gold or silver. The opium trade, which created a steady demand among Chinese addicts for opium imported by the West, solved this chronic trade imbalance.

The East India Company did not carry the opium itself but, because of the Chinese ban, farmed it out to “country traders”—i.e., private traders who were licensed by the company to take goods from India to China. The country traders sold the opium to smugglers along the Chinese coast. The gold and silver the traders received from those sales were then turned over to the East India Company. In China the company used the gold and silver it received to purchase goods that could be sold profitably in England.

Meanwhile, a network of opium distribution had formed throughout China, often with the connivance of corrupt officials. Levels of opium addiction grew so high that it began to affect the imperial troops and the official classes. The efforts of the Qing dynasty to enforce the opium restrictions resulted in two armed conflicts between China and the West, known as the Opium Wars, both of which China lost and which resulted in various measures that contributed to the decline of the Qing. The first war, between Britain and China (1839–42), did not legalize the trade, but it did halt Chinese efforts to stop it. In the second Opium War (1856–60)—fought between a British-French alliance and China—the Chinese government was forced to legalize the trade, though it did levy a small import tax on opium. By that time opium imports to China had reached 50,000 to 60,000 chests a year, and they continued to increase for the next three decades.

By 1906, however, the importance of opium in the West’s trade with China had declined, and the Qing government was able to begin to regulate the importation and consumption of the drug. In 1907 China signed the Ten Years’ Agreement with India, whereby China agreed to forbid native cultivation and consumption of opium on the understanding that the export of Indian opium would decline in proportion and cease completely in 10 years. The trade was thus almost completely stopped by 1917.

Opium smoking and addiction remained a problem in China during the subsequent decades, however, since the weakened central republican government could not wipe out the native cultivation of opium. Opium smoking was finally eradicated by the Chinese communists after they came to power in 1949.