Trading For Tea: A Study of the English East India Company's Tea Trade with China and the Related Financial Issues, 1760-1833

The East India Company played a vital role in British commercial expansion and European-Asian economic links in the early modem period, and its business activities covered many regions of the East, including China, the most populous nation on earth. The general structure and development of EIC's Chinese trade had been studied, but, details of the Company's tea trade with China, the most important and profitable branch of the Company's commercial affairs after the late eighteenth century, remain to be explored. In particular, the issue of its management of tea procurement from China remains largely unstudied. This thesis thus examines the EIC's tea trade with China and the related financial issues in 1760-1833, the heyday of the Company's Chinese tea trade. Because Canton was the only Chinese port open for the international maritime trade after 1760, the Company's trade in China was in effect a trade with Canton. The Canton Commercial System which shaped the Ch'ing Empire's foreign trade policy had another major feature, that is, only a handful of merchants, the Hong merchants, could deal with foreigners. Accordingly, transactions with the Hong merchants in order to procure tea for home demand became one of the Company's priorities in its Canton trade. This research thus investigates in detail the tea transactions between the EIC's supercargoes and the Hong merchants. In particular, the different tea-purchasing methods adopted by the Company are examined. Special attention is also paid to the system of quality control which presents a picture of how the Company developed an efficient system of tea purchases and struck a balance between organising an adequate supply for British consumption and maintaining quality. While developing an efficient tea-purchasing system, the EIC was also struggling to obtain enough funds to finance its tea trade without the needs to continue shipment of a large amount of silver bullion from Britain. The Company finally succeeded in making use of its increasing bargaining power and adopted a trucking system through which British manufactures were exported to Canton in exchange for tea. Indian sources of revenue and the private intra-Asian trade also played a crucial role in the Company's funding of its enlarged tea trade at Canton. The creation of these different flows of fund and their importance are in turn discussed in this thesis. This study also examines financial relationships between the EIC and the Hong merchants, and especially the strong position gained by the Company. Moreover, the condition of the EIC China trade after the beginning of the nineteenth century is highlighted because by then the dual-monopoly pattern of the Anglo-Chinese trade was facing a challenge. These different areas of discussion provide a comprehensive study of the Company's tea trade with China after the 1760 which helps us more fully to appreciate the EIC's position in the European-Asian commercial links in the early modem period.