CHINA: The Closed Door

Armed East Indiamen, huge square-sails set to the trade winds, brought British merchants to China in the 18th century. Ashore, the traders were treated to fireworks and feasting by hong merchants, who alone among Chinese were permitted to deal with foreigners. But opposition to the old East India Co. was growing in England. Company Surgeon William Jardine saw his chance. He and his partner, James Matheson, a fellow Scot, doubled as consular representatives of foreign countries. Soon Jardine, Matheson & Co. were making millions in the China trade.

Getting In. China’s Manchu dynasty began to fear the influence of the foreigners on the shaky empire. Citing the importation of opium as their reason, the Manchus began obstructing trade. Tough Merchant Jardine persuaded Foreign Secretary Lord Palmerston to send in the British navy. The Manchus fought back, and the result was the 1839 Opium War, which the British won. They made a treaty by which five Chinese ports (Canton, Amoy, Foochow, Ningpo and Shanghai) were thrown open to world trade.

Fast clipper ships replaced the slow-moving East Indiamen, and China tea was the profitable cargo. To prevent idlers from wasting his business hours, Merchant Jardine kept no chair in his office but his own. He made huge deals with Bombay Tycoon Jamsetjee Jeejeebboy. Hundreds of young Englishmen, attracted by high wages & high life, flocked to China. Race tracks were built, blood horses imported. Gibb, Livingstone & Co. (John Gibb was a member of the Race Club Committee) never questioned the living expenses of their young employees unless the soda-water bills for their mess exceeded $500 a month.

By the mid-seventies, 90% of China’s imports came from Britain, British India and Hong Kong, and 70% of China’s exports were going to British ports. But the heyday of the British merchants began after the Suez Canal was opened, with steam packets pushing the sailing clippers off the seas. It lasted until the Sino-Japanese War, which followed by World War II, shook loose the British grip on China. But in 1946 Jardine’s had regained 50% of the tea trade.

Getting Out. It was firms like Jardine’s and Butterfield & Swire, hoping to do business with the Communists, that did much to persuade the British Labor government to recognize Mao Tse-tung. In British-held Hong Kong, trade with China skyrocketed. The artificial prosperity did not last. On the mainland, the Communists imposed confiscatory taxes on foreign enterprises, shut off trade, and while refusing to allow workers to be fired, denied exit permits to some 700 British nationals.

Four months ago, the disillusioned big merchant companies decided to pull out. The result was the decision announced last week by Foreign Secretary Anthony Eden: British merchants would liquidate assets in China worth more than $840 million. They hoped their employees would be let out of the country.

The British still do not plan to abandon diplomatic recognition of Red China, though their chargé d’affaires in Peking has never been received by anyone higher than the second assistant to the Foreign Minister.