After 1784, U.S. and Chinese merchants carried on a lucrative trade in products such as silk, tea, porcelain, silver, and ginseng. Colonials had traded with China through the British East India Company, but the newly independent United States began to trade with China directly in 1784 when the ship Empress of China embarked on a long journey from New York City to Canton. The ship returned to New York in 1785 loaded with teas, silks, and porcelain from which its investors made a healthy 30 percent profit. U.S. trade with China took place through the exclusive organization called the Co-Hong, or Hong, merchants. The Co-Hong had a corporate monopoly granted by the Qing dynasty to conduct trading operations with all foreigners. The Hong merchants also coordinated and managed various trading factories in Canton; these served as warehouses, offices, treasuries, and residences for foreign traders in Canton, including those from the United States.

U.S. neutrality with regard to the European wars allowed the nation's ships free trading opportunities in China, without fear that merchant ships would be captured. By the 1790s, trade between China and the United States focused mainly on silver, silks, and tea. U.S. merchants carried millions of dollars' worth of silver bullion obtained in South America to China in exchange for tea and silks. In Canton, U.S. merchants competed for the Co-Hong's trade with merchants from various Western nations.

By far, the largest rival to United States trade with China was the British East India Company. The company dominated trade with China and was less dependent on silver than other Western traders. The East India Company relied more on its own trade proceeds to purchase Chinese teas and silks, thereby reducing its burden to provide the Hong merchants with silver. This put the other traders at a considerable disadvantage due to the expense of purchasing and transporting silver for trade in Canton.

Bibliography:

1) Yu-Kwei Cheng, Foreign Trade and Industrial Development of China (Washington, D.C.: University Press of Washington, D.C., 1956).

2) Weng Eang Chong, The Hong Merchants of Canton: Chinese Merchants in Sino-Western Trade (Surrey, England: Biddles Limited, 1997).

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