China: 'A Hoppo's (Customs Officials') Boat, Canton (Guangzhou), c. 1805.

The Canton System (1757-1842) served as a means for China to control trade with the west within its own country. Seen from the European view, it was a complement to the Old China Trade.

Despite Chinese efforts to restrict European traders and citizens to Macau, European trade spread throughout China. The Canton System supported European traders' with China. It also forced large amounts of direct trade between European merchants and Chinese civilians. Instead, the Europeans, generally employees of major trading companies (most importantly the British East India Company) had to trade with an association of Chinese merchants known as the Cohong.

The emperor appointed an official called the Hoppo (the spelling at the time of 戶部, Hubu, which was short for 粵海關部, Yuehaiguanbu), to take charge and collect taxes from the goods traded. The hoppo was responsible for merchant relations on behalf of the Qing court. It was an important position since Western merchants were not allowed to communicate with the emperor directly.

The European (and soon the American) presence was restricted to the Thirteen Factories on the harbour of Canton (Guangzhou) during the trading season, but the foreign traders were permitted to remain on Chinese soil at Macau in the off-season (a mitigation of earlier Chinese restrictions on trade, which had banned foreign residence in the off-season).

The first trade that existed with China was for silks, porcelain and most lucratively tea. It was the incredible financial deficit caused by European demand for tea that spurred the British to begin shipping opium to China from its colonies in India.

Despite Britain's growing apprehension at the Canton System, revenue from opium eased British resentment, and the system remained intact until the Opium Wars, which established 'treaty ports' in accordance with the Treaty of Nanjing. Each of these ports was governed, not by Chinese laws, but rather the laws of the country controlling the port.

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