British Income Tax Was Introduced To Help Finance Which Conflict History of Tea in Hong Kong – Tea, Opium and the Balance of Trade

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History of Tea in Hong Kong – Tea, Opium and the Balance of Trade

Even the most casual visitor to Hong Kong cannot fail to notice that it is a unique and vibrant Asian city. Hong Kong is exciting, different, exotic and welcoming all rolled into one. It is basically Chinese (most residents are Cantonese) but most people speak English and almost everyone is engaged in some kind of trade.

For most visitors, Hong Kong is a place of beauty, excitement and wonder from the moment they arrive until they leave.

Hong Kong consists of three parts: Victoria Island and the surrounding islands, Kowloon, located at the tip of the peninsula leading to mainland China and the rest of the peninsula known as the New Territories. Between Victoria Island and Kowloon was a world-class port that put Hong Kong on the map as the entry point to China.

The main drink of choice is tea in one form or another and all meals are usually accompanied by pots of hot black, green or pu-erh tea. Hong Kong has more than 13,000 restaurants and tea is the main drink in almost all of them.

Tea is more than a drink in Hong Kong: it is a way of life rooted in the very essence of the culture. But it should be noted that Hong Kong is not a producer of tea, nor just a consumer of fine Chinese tea.

However, Hong Kong played one of the most important roles in the introduction of Chinese tea to the West in general and to Great Britain in particular, but this role was won at a very high price.

Chinese tea, Hong Kong and the British Empire

During the 17th century Dutch and Portuguese traders introduced Chinese tea to the European continent and British traders soon followed this trend.

Imports of tea grew slowly in Britain due to high taxes on what was considered a luxury item and the monopolistic business practices of a small number of importers such as the John and East India companies. Tea was so popular and demand was so high, however, that smuggling and adulteration of tea supplies became rampant.

Finally, enlightened fiscal policies and the opening of distribution channels took place, smuggling evaporated and all classes of the English population increased the demand for tea, supplies increased dramatically and tea consumption has been part of English culture to this day.

In the 19th century, China was the main supplier to the British and by 1830 annual imports of Chinese tea into Britain amounted to 30 million pounds of tea or an average of 2 pounds of tea for each citizen.

In addition to its place in British society as the most popular drink, tea was central to British wealth due to the tax revenue it generated and the wealth it provided to powerful British merchant companies.

British trade

By the middle of the 19th century, Britain was considered the first mercantile empire and British manufactured goods were sold and traded all over the world. As a leader in the Industrial Revolution, Britain produced high-quality consumer goods that served as trade items through strategically located outposts around the world.

Many of these outposts were established and supplied by the formidable British army and navy in what would become the key element of British imperialism.

Due to the trade imbalance caused by the increasing level of tea imports, Britain was eager to expand trade with China to equalize trade and resolve its trade balance deficit. China has been regarded by most trade experts as the world’s largest untapped market.

Cultural differences, the demand for bullion and the opium wars

While Britain was eager to trade using its supply of manufactured goods, China was not. Based on a different cultural view in which merchants and traders were viewed as part of a lower caste and distrusted. Foreign merchants were especially suspect. These merchants were restricted in what goods they could sell and where they could sell them. China imposed high taxes and merchants were extremely limited in their trading activities.

Add to this the fact that China was basically a closed society and the result was a Chinese demand that tea sales required payment in silver bullion rather than trading in goods. As Britain did not have enough silver to meet the demands, a conflict arose. To overcome this problem, Britain devised an aggressive strategy that included the importation of opium and eventually all-out war.

In an attempt to reverse the balance of trade, the British imported increasing amounts of opium into China. Opium, a highly addictive drug produced in the Bengal region of India, was controlled by Britain as a result of the British annexation of Bengal in 1757.

As more and more Chinese became addicted, the balance of trade was reversed. To pay for the growing volume of opium imports, silver began flowing out of China into British coffers. However, Britain was still in danger, because trade was still carried out in mainland China under the control of the Chinese emperor and the bureaucracy.

In the late 1830s, to curb opium’s damage to the Chinese population, Chinese officials confiscated and destroyed thousands of chests of opium stored in English merchants’ warehouses in Canton China. Because of these developments on the mainland, Britain required an offshore base of operations under British control and Hong Kong, then a sleepy fishing village whose main export was salt, was an ideal candidate.

According to the directives of Queen Victoria, Great Britain sent a naval expeditionary squadron to China. This action led to the first Opium War (1839-42), which China, faced with an overwhelming military force and the reinforced troops of India, lost.

The Treaty of Nanking, which ended the war, forced the Chinese to open five ports to foreign trade, abolish cohong (a state trade monopoly system that restricted imports), drastically limit the amount of customs duties they could collect, pay an indemnity of 21 million silver dollars, cedes the island of Hong Kong to Great Britain, and grants not only Great Britain, but also its allies, extraterritoriality, which made Westerners immune from Chinese law.

As a result of the First Opium War, Britain not only opened up trade with China, but established a base of operations in Hong Kong that would remain until the island was returned to China in 1997.

These terms have adversely affected the common people. Unemployment rose substantially, especially in Canton, where the tea trade was an important business. Smaller, locally owned industries, unable to compete against imported products of factory-made parts, declined, depriving many peasant families of an important source of supplemental income. Taxes soared as the government tried to raise enough funds to pay the compensation. And as opium continued to pour into the country, the number of addicts multiplied. Millions of lives were affected and often ruined.

As the British position on Victoria Island and Kowloon consolidated, the British sought to extend their advantageous position and fought the Second Opium War in 1856. Given the overwhelming technological advantage of the British, the Chinese were defeated and forced to accept a humiliating peace.

Under the terms of the Treaty of Tientsin (1858) the Chinese opened new ports to trade and allowed foreigners with passports to travel inland. The rest of the Hong Kong peninsula (the New Territories) was ceded to Great Britain and Christian’s gained the right to spread their faith and own property, thus opening another means of western penetration. The United States and Russia obtained the same privileges in different treaties.

Despite the dislocation and tragedy on the mainland, Hong Kong has grown and prospered in a capitalist world. China continued to suffer under various warlords and revolution and remained a third world country until recently. However, Hong Kong became a world center of trade and finance and its citizens prospered. Hong Kong remained under British rule until 1997, when it was returned as part of mainland China.

Hong Kong’s prosperity continues to this day, but it began with the import and export of tea.

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