29 August 1842: The first Opium war ends

On this day in 1842, the signing of the Treaty of Nanking ended the first Opium war with China.

Signing the Treaty of Nanking © Print Collector/Getty Images
The signing of the Treaty of Nanking ended the First Opium War
(Image credit: © Print Collector/Getty Images)

Today, Western governments spend billions trying to stop the illegal drugs trade. However, in the 19th century, Britain not only encouraged the flow of hard drugs but also went to war twice to prevent China's government from stopping it.

At the time, China made it almost impossible for traders to sell British and other Western goods locally. The sole exception was tea from India. But tea merchants found they could boost profits by smuggling opium with their cargo.

Due to its addictive nature (it contains morphine), demand exploded, with smuggling networks springing up around the Chinese coast. Selling opium was officially discouraged. But smugglers simply bribed local officials – many of them addicts themselves – to look the other way.

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By the late 1830s, political pressure on China's Emperor was growing. Not only was there concern at the social and economic costs of the trade, but gold and silver was flowing out of China to pay for opium imports.

A direct appeal to Queen Victoria failed. So a hard-line trade commissioner, Lin Zexu, was appointed. He cracked down, confiscating British traders' opium supplies and forcing them to pledge their goods (and lives) against a return to the trade.

The British government backed the measures until it realised it would have to compensate traders. It launched a military blockade of China. Within two years China had been forced into signing the Treaty of Nanking, legalising the trade and removing restrictions on other British goods.

While Chinese historians consider this as a national humiliation, there is also agreement that it opened China up to the rest of the world.

Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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