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Is China Starting Up a new Opium War? [1]

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Date: 2025-01-14

[This is a version of a substack article I just wrote and posted there.]

Eighteenth-century England was mad for tea, but the primary (almost the only) source for tea was China. China was quite to willing to take British silver for its tea, but wasn’t interested in buying anything in return. This imbalance was threatening to bankrupt Britain, so they came up with an ingenious — and diabolical — two-part solution: steal tea plants and the secret of processing tea leaves, and get the Chinese hooked on British (Afghan) opium. Britain's Great Tea Heist (The Atlantic):

It seemed so simple in the mid-1700s: China had tea, Britain wanted tea. First introduced by Portuguese princess Catherine de Braganza in 1662, tea soon overtook beer as Britain’s favorite brew. The only problem . . . was that the Chinese weren’t purchasing any British goods in return. Britain was simply dumping its silver into China, creating a serious balance of payments problem. Britain’s solution? Trade drugs for drugs—specifically, the caffeine fix in tea for the poppies that grow abundantly on the Afghanistan-Pakistan border, which at the time was part of the British empire. . . . But drug dealing proved to be an expensive headache, and so, in 1848, Britain embarked on the biggest botanical heist in history, as well as one of the biggest thefts of intellectual property to date: stealing Chinese tea plants, as well as Chinese tea-processing expertise, in order to create a tea industry in India.

The Qing dynasty, which ruled China, was not keen on having its citizens addicted to opium, and tried to put a stop to the trade. In response, Britain went to war with China twice — the Opium Wars of 1839-42 and (along with France) of 1856-60 — which ended with British control of Hong Kong and China enduring a century of humiliation by Western powers (the US included), who exploited China’s resources and money while demanding extraterritorial exemption from Chinese law.

It can be fairly argued that misunderstandings, national pride, and short-sighted economic interests on the part of both Britain and China created the conditions that led to the Opium Wars, Chinese economic colonization, and even the Chinese Communist revolution of 1949. But while history never exactly repeats itself, we are now in danger of recreating those same conditions today.

China’s Trade Surplus Reaches a Record of Nearly $1 Trillion

China announced on Monday that its trade surplus reached almost $1 trillion last year as its exports swamped the globe, while the country’s own businesses and households spent cautiously on imports. . . . The outpouring of goods from Chinese factories has drawn criticism from an ever-lengthening list of China’s trade partners. Industrialized and developing countries alike have erected tariffs, attempting to slow the tide. In many instances, China has retaliated in kind, bringing the world closer to a trade war that could further destabilize the global economy.

The NYT story focuses mainly on tariffs and Trump, though it does discuss how other countries are concerned about the trade imbalance. But I feel the author missed an obvious and disturbing parallel between the current situation and the similar one in the early nineteenth century.

China’s Overseas Lending

China’s overseas lending boom created high debt burdens in the developing world: more than two dozen countries now owe more than 10% of their GDP to China’s state-owned creditors.

America’s China Strategy Is Incomplete

Beijing’s lopsided advantage reflects the global economy’s continued overreliance—both real and perceived—on China. For decades, China’s massive size and growth created a sort of gravitational pull. Countries and companies raced to take advantage of the opportunities China offered. Beijing used industrial policy, low-cost labor, intellectual property theft, and trade and investment barriers to shape those interactions and push Chinese firms to the center of global value chains. . . . Beijing has shown that it is not benevolent. Countries now worry about Chinese economic coercion reducing their exports and investments, Chinese overcapacity harming their domestic industries, and potential Chinese military action against Taiwan disrupting critical supply chains.

China, I feel, has learned a number of valuable lessons from its humiliating experiences of the Opium Wars and 19th-20th century domination by Western economic powers. But there is one lesson from the tea and opium conflict that I believe the Chinese leadership has forgotten: it was British resentment of Chinese hoarding of all that silver that triggered the mess that followed.

China may no longer have an emperor, but it still has the imperial attitude that it is the Middle Kingdom, with heaven above it and all the rest of the world beneath. They may be more subtle about it, but their belief in China’s inherent superiority (and still, to this day, their desire to erase the humiliation they endured) continues to influence, even control, their approach to international relations.

But if we misunderstand China, China also misunderstands us. They forget that it was resentment against China’s tea and silver policy that drove the British to sell opium in the first place. They may believe that this time they can get away with accumulating the world’s wealth because this time they have the power to enforce the mandate of heaven. But asymmetrical warfare works both ways. The more China presses what it sees as its advantage, the more the world will resent it and look for ways to strike back.

It may well be that history will fail to repeat itself in one other way: this time around, nobody wins.

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[1] Url: https://www.dailykos.com/stories/2025/1/14/2296961/-Is-China-Starting-Up-a-new-Opium-War?pm_campaign=front_page&pm_source=more_community&pm_medium=web

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