British Establish Trading Post in Canton

The British East India Company established a post at Canton, China, to trade primarily for tea, a commodity that had acquired a great deal of value and would exert significant influence upon the world markets, leading ultimately to the American Revolutionary War in the eighteenth century and the Opium Wars between England and China in the nineteenth.

Summary of Event

At the very end of the seventeenth century, the British East India Company British East India Company established a trading Trade;England in Canton post in Guangzhou (Canton), China. Although the post had little immediate impact, within a short time it came to play a major role in world events. However, an overview of the company’s history is necessary to grasp the significance of its establishment of a permanent trading post in China. [kw]British Establish Trading Post in Canton (1699)
[kw]Canton, British Establish Trading Post in (1699)
[kw]Trading Post in Canton, British Establish (1699)
Economics;1699: British Establish Trading Post in Canton[3100]
Trade and commerce;1699: British Establish Trading Post in Canton[3100]
China;1699: British Establish Trading Post in Canton[3100]
Tea, trade in
Canton, tea trade in

On the last day of the sixteenth century, December 31, 1600 England’s Queen Elizabeth I Elizabeth I (queen of England) granted a royal charter to the British East India Company, or as it was formally known, the Governor and Company of Merchants of London Trading into the East Indies. The company was given exclusive rights to trade in the East Indies for fifteen years. The “John Company,” or simply the “Company,” as it came to be popularly called, was founded by a group of businessmen willing to take great financial risk. Initially, the organization made headway into India, which was soon to be called the Jewel in the Crown. The profits generated were so enormous that back in England, King James I James I (king of England);British East India Company once again signed an exclusive, unrestricted charter with the company.

The British East India Company grew quickly and became so powerful that in time it acquired governmental and military functions that overshadowed its commercial activities. So great was its supremacy that it exceeded the Portuguese and the Dutch in the trade of cotton, silk, indigo, saltpeter, and tea. After the Restoration of the monarchy in 1660, the English king Charles II Charles II (king of England);British East India Company and gave the company the right to annex territories, to mint money, to raise native armies, and even to declare war. In short, as a commercial enterprise, the John Company became a nation unto itself.

This was how the situation stood when, in 1699, the Macclesfield, one of the company’s new fast-sailing galley supercargo ships, sailed from London in six months and moored in Whampoon Harbor to establish a trading post in Guangzhou, China—which the English promptly named Canton—to trade silk, porcelain, and, most important, tea for silver. Canton was the major port in southern China. It took less than one hundred years for China to outstrip India in profits for the company.


During the seventeenth century, tea became a powerful economic factor by providing large sources of government revenue. From its arrival in Europe, taxes on tea provided a means of enriching the royal coffers. It quickly became a mass-produced staple and eventually accounted for one-tenth of the British tax income. Indeed, in England the demand for tea increased to such proportions that by the late 1700’, the drink accounted for more than 60 percent of the company’s total trade. However, the company found it difficult to sell its products, primarily woolen goods, in China and so experienced a deficit in Chinese trade until the early nineteenth century. China;tea trade

Unlike many other Eastern nations, China set itself apart from the rest of the world. While trade was certainly allowed, European traders were not allowed to remain on Chinese soil. In 1773, Lord McCartney, the first envoy of Britain to China, arrived with a large British delegation on board a sixty-four-gun man-of-war. His meeting with Emperor Qianlong Qianlong during his diplomatic mission to the Celestial Empire in time ended China’s isolationist policy and brought about the beginning of a relaxation of China’s restrictive trading policies.

Two years later, Britain lost its American colonies (1775) and experienced a sudden and severe loss of silver. However, by this time, the British demand for Chinese tea was insatiable and the company was forced to look around for a different good to trade for tea. It found the solution in the form of opium. The company began to pay for its tea with opium grown in its Indian colonies and smuggled to China in the company’s ships. Indeed, the start of a large-scale trade in opium from the British East India company in India to China reversed the imbalance of trade, as it created widespread addiction among the Chinese population and ultimately led to the Opium Wars between England and China.

Meanwhile, in 1773, the New England colonists rebelled against the “tea tax” imposed upon them without their consent, and angry patriots boarded the company’s ships, where they threw 342 chests of tea into Boston Harbor. In time, this came to be known as the Boston Tea Party. As a result, British king George III closed Boston Harbor and royal troops occupied the city. The colonial leaders came together to resist the occupation, and the American Revolution was underway.

The British East India company was arguably the largest trading power of all time. Its influence stretched from London to China and later to Australia. For more than two centuries, it controlled half of the world’s trade and established the largest empire the world has ever known. Indeed, without the company, there simply would have been no British Empire.

Further Reading

  • Hanes, William Travis, et al. The Opium Wars: The Addiction of One Empire and the Corruption of Another. New York: Sourcebooks, 2002. Succinctly illustrates how the British dependence on tea and the loss of its American colonies in 1775 led to Britain’s turn to opium and the subsequent ruin of China and the emergence of Hong Kong and Singapore.
  • Keay, John. The Honourable Company: A History of the English East India Company. New York: Macmillan, 1991. Beginning in 1600, Keay uses the journals of British East India Company officers to illustrate the rise and ultimate demise of the greatest trading power of all time. Comprehensive coverage of Britain’s first venture into Canton, China, in 1699.
  • Pettigrew, Jane. A Social History of Tea. London: National Trust, 2002. Explores tea’s enormous influence on society and history. Includes accounts of the British East India Company and its influence in China, the Boston Tea Party, smuggling, and the Opium Wars.
  • Wilbur, Marguerite. The East India Company and the British Empire in the Far East. London: Russell & Russell, 1970. Approachable account of the British East India Company, its might and right, and its quest for profits in the East, especially in China.

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