Page 38 - Export Porcelain and Globakization- GOOD READ

then be used to finance Chinese commodities. But this was not the only advantage of
the EIC government in Calcutta. As John Darwin points out, this conquest of one of
the richest regions in Asia marked the beginning of a British Empire ruling the world.
The terms of trade for cotton had been changed and England became, over the
decades, the biggest industrialized cotton yarn producer, organizing the worldwide
cotton value chain between Asia, Europe, Africa and America.
With the conquest of Bengal and the establishment of the Bengal presidency in
1765, under the rule of the EIC, the country trade between Bengal and other Asian
regions including China took off and the British were able to copy the Portuguese and
Dutch intra-Asian trade pattern. Initially, the EIC tried to monopolize – similar to the
VOC – the country trade between India, Indonesia and China, but they could not
control it effectively. Instead, they at least, required private merchants to have a
license for trade. Over the years the intra-Asian country trade became mainly private
business. The sale of raw cotton, cotton goods, pearls, saltpetre, shark fins and many
other items became an important source of income for Indiabased British private
traders in Canton. From the beginning, the trade balance of the private merchants with
the Chinese Hongs in Canton was positive. They sold many things in Canton, but
received mainly silver. The tea business was exclusively in the hands of the EIC and
other Chinese items except porcelain were not really in demand. In 1786 the positive
trade balance of the private traders exceeded one million taels whereas the EIC had a
negative balance of almost four million taels. With the proceeds of the sales further
silver bullion import could be reduced. Only ten years later in the 1798-1799 season
the British trade balance with China became positive for the first time since the
Macclesfield started the Canton trade in 1699. At the turning point from the 18th to
the 19th century China lost the trade dominance it had maintained for centuries. The
silver magnet turned into a silver pump in the other direction. The terms of trade had
been changed within a few years. And a new product from Bengal became fashionable
in China, which had the power to reverse the trade imbalance between England and
China: opium.
Opium consumption had a long tradition in China and was imported first from Arab
merchants during the Tang dynasty. In 1729 an imperial decree prohibited the
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smoking and domestic trading of opium in China , but the Chinese government was
not able to stop the illegal trade. When the EIC took over control of Bengal, the
British started shipping Indian opium to China. In 1773 the EIC established a
government monopoly over opium purchase and sales in India and organized public
auctions in Calcutta where country traders got their opium for the Canton trade. Since
opium trade with China was illegal, the EIC did not want to get involved directly in
the transport and sale to and in China. A triangular business was established. Private
traders bought opium in Calcutta, smuggled it into China, received silver on site,
which then was handed over to the EIC in Canton for which the traders got bills of
exchange. The bills could be cashed out either in India or in London. This was a
win-win scheme. The country traders had no trouble shipping silver coins from
Canton on a risky trip back home and the EIC had no need any more to import silver
from Europe: one of the reasons the silver bullion import of the EIC came to an end in
the 1770s. The EIC was able to get the necessary silver for purchasing tea and
porcelain from the private British merchants in Canton. The statistics show the
expansion of the bills of exchange together with the expansion of the Indian-Chinese
country trade carried out by British merchants. From 1779-1785 two thirds of the
funds of the EIC Canton treasury consisted of bills of exchange – silver purchased in
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Canton in return for treasury receipts . No silver had to be imported from Europe
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