Opium Wars rejoined

The seriously destabilizing trade imbalance brought on by insatiable American imports of cheap Chinese goods won't be easy to defuse, given past Chinese experience with the methods employed by leaders in the West

by Kevin Potvin <kpotvin@republic-news.org>

In a famous anecdote, Chou En Lai, chair of the Communist Party of China, when asked by a French journalist what he thought the historical significance of the French Revolution of 1791 was, said "It's too early to tell."

No such fog exists for the new and younger Chinese leadership over the meaning of the Opium Wars China lost to Britain in 1839 - 1842. It is arguable that the price China paid in that loss has only now been paid off.

The British, at the time the world's dominant empire, were running an enormous trade deficit with China due to heavy British imports of Chinese tea. The average London worker spent an estimated 5% of his or her annual income on tea, all of it imported, mostly from China. The Chinese, on the other hand, were uninterested in British export commodities like wool, and began competing successfully in their own cotton market.

To protect their currency against an empire-threatening implosion, the British decided to solve the trade imbalance by peddling to China vast quantities of opium planted in Afghanistan and brought to huge Indian refineries. The Chinese authorities naturally banned imports of opium, but the British smuggled a great deal of the stuff into the country anyway, and gave it away for free where they saw the possibility of hooking more addicts. It is said that upwards of 10% of the entire Chinese population was addicted by the late 1830s, and about half of all men between the ages of 18 and 40-usually the most economically productive in any economy.

British drug pushing was creating a social and economic catastrophe in China. The Chinese tried to confiscate British warehouses in Hong Kong and Shanghai stuffed with opium ready for smuggling inland. The British military, fresh from the Napoleonic Wars and sporting speedy cannon boats, responded by shelling virtually every city up and down the rivers and coasts of China.

The "Unequal Treaties" the Chinese were forced to sign with Britain, followed by all other Western powers, consigned the country to a century of economic servitude and a disastrous and costly string of rebellions, civil wars, and revolutions.

Now, in only blink of time, so far as the Chinese are concerned, a delegation of US Treasury officials will be welcomed to China to discuss what China should do about the enormous US trade deficit with that country. The US overall trade deficit is now about $645 billion, with about a quarter of that, or $160 billion, attributable to trade with China.

Top of the list for US officials is a stiff revaluation of the Chinese currency to raise the price of Chinese exports to the US. The dilemma for the Chinese is this: If they refuse to help yet another Western imperial power with its inability to compete with Chinese exports, does it spell another disastrous war? Or is China ready militarily to take on the US in any resumption of the British Opium Wars?

Or, in what would be the best outcome, is the West (this time represented by the US), finally ready to admit China as a major power deserving full respect, instead of a wasteland deserving economic attacks and social and military destruction more typically meted out to China by the West over the last century and a half ?

While the US Treasury department delegates will undoubtedly arrive completely unaware of any of this history, their Chinese counterparts will be thinking about nothing but, since the last time China built up such a large trade surplus with the West, a great deal of destruction followed, and the Chinese typically have a long enough memory to recall it.

As China's closest friend in the West (and not just because of Dr Norman Bethune and Prime Minister Pierre Trudeau), and at the same time as America's closest friend and trading partner, Canada is well placed to play a prominent role in helping the Americans and the Chinese understand one another as they engage over an extremely serious trade issue that may, if mishandled, lead to a catastrophe for the whole world.

Explaining to the Americans that the Chinese only wish to be respected and not attacked again is the easy part. Explaining to the Chinese that the Americans would never launch military attacks to solve an economic imbalance is the hard part-it might not be true. And China has been down that road before.

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