Abstract
Whether at the end of the Qing Dynasty, under the domination of the warlords or during the Republican period, opium was omnipresent in China. De facto legalized between 1857 and 1906, it was grown in Yunnan, Sichuan and Guizhou, while Beijing, Hankou, Tianjin, Chengdu and Shanghai controlled the market. The drug was even trafficked in Yan’an, in communist-controlled areas, in the 1940s.
A history of opium and its interactions with a dying empire and a fragmented republic, The Opium Business sets out to understand the mechanisms of the drug trade, the evolution of the industry and its impact on China’s economy. It is also the story of a globalized product, whose profits were negotiated between traffickers, business elites and the state.
The period covered runs from the first half of the nineteenth century to the Japanese defeat at the end of the Second World War. The book is organized into six chapters that follow a chronological plan, from 1832 to 1945, to trace the profound changes in the production, supply and sale of opium during this period. Peter Thilly examines what he felicitously terms the ‘negotiated illegality’ of the drug, before analysing its de facto legalization in the last decades of the Qing Dynasty, and finally the (ineffective) ban on its cultivation and consumption in 1906. This evolution covers a complex process involving smuggled imports and relations with local wholesalers and officials, who had to be bribed. The sources on which this work is based come from Chinese as well as Taiwanese, British, Swiss and American archives; newspapers; commercial correspondence from great trading houses like Jardine, Matheson & Co.; and foreign office reports.
Specialists in maritime history will be particularly interested in several questions extensively developed throughout the book: the specific features of the maritime frontier in southern China and the violence with which the coastline was reclaimed in the second half of the seventeenth century; the crumbling of Chinese maritime power under the Qing, despite the gradual reopening of overseas trade; the rebirth of maritime trade along new lines with the establishment of permanent Chinese communities in Batavia, Manila, Singapore and Penang; and lastly – although this particularity has already been noted by Rhoads Murphey in The Outsiders – how Shanghai and Tianjin were treated in the same way as ports in South East Asia (that is, in effect, as foreign ports) by the transhippers of Fujian. 1
The book takes as its focal point the province of Fujian, and in particular the stretch of Chinese coastline that runs from Zhangzhou to Quanzhou. In this coastal strip, riddled with creeks ideal for smuggling, the powerful lineages that structured local society chartered the ships, recruited the crews and pooled the capital needed for the opium trade. The lineages also play a major role in interpreting and manipulating the legal and regulatory framework governing the sale of opium in China. This particular alchemy produced by the importation and distribution of the drug profoundly reshaped the regional economy, while smugglers were able to forge strong links with the local bureaucracy by involving it in lucrative trafficking.
As a maritime frontier and Mediterranean hub, Fujian was also at the centre of the negotiation of new practices in international law, borders and citizenship. 2 But the province was also a laboratory for cooperation between British, American and Parsee opium dealers. Thilly shows how opium carries in its wake an enormous quantity of legal goods, which were then smuggled into China. Sugar, rice, cotton, bethel nuts, saltpetre, tea, medicinal plants and camphor were also carried in the holds. Finally, Fujianese merchants transported Chinese emigrants to South East Asia, and every summer returned from Singapore or Batavia with cargoes of opium, as well as rice and sugar, which they took to Shanghai and Tianjin.
One of the paradoxes of the First Opium War (1839–1842) was that the treaty that ended it did not clarify the question of whether the drug was legal or illegal. In fact, the opium trade continued to expand well into the 1850s. The Treaty of Tianjin (1860) imposed only low taxes on the drug. In practice, opium was subject to an import tax levied by maritime customs and a tax on domestic transport (lijin) collected by the provincial authorities. In the 1920s, the establishment of an ‘opium prohibition bureau’ created, in reality, an agency that licensed the transport, storage and retailing of the drug. The Guomindang then easily leased out the supply and distribution of the drug to ‘opium kings’ in Fujian such as Ye Qinghe.
As Chinese merchants were constantly concerned with avoiding taxes, they endeavoured to trade with foreigners in areas outside the jurisdiction of the open ports established by the treaties of 1842 and 1860. In this respect, opium was a flagship product, generating considerable profits and benefitting from a tried-and-tested infrastructure. In 1850, a British consul estimated that between £100,000 and £200,000 worth of legal products were imported into Xiamen from ships stationed outside the port, thus escaping all taxation. Moreover, closely enmeshed with a legal trade and a financial infrastructure set up in treaty ports, opium had a strong link with the tea trade. Close to cash, opium was often used as a means of payment: tea brokers were encouraged to accept it as currency in return for a discount on the prices charged in Fuzhou.
As South East Asia emerged as a promising market for opium, Fujian was from the 1880s until the 1930s at the centre of a trade that extended as far as Singapore, Manila and Batavia. Fujian’s maritime entrepreneurs were thus able to weave a vast transport network in territories ruled by different colonial jurisdictions – the Philippines under the domination of the United States, the Dutch Indies, the Straits Settlements and Japan, which emerged as a major player in the region after the First World War. Xiamen and its neighbouring districts then marked the limit of Japanese expansion in southern China, and it was under Japanese protection that Taiwanese notables began trafficking opium in Xiamen.
Prohibition at the beginning of the twentieth century led to a rapid expansion in drug trafficking. For local officials, drugs generated considerable volumes of cash. But this windfall was also appreciated by a wide range of players, from revolutionary armies to warlords and naval garrisons, not to mention the Japanese occupiers, who were quick to make deals with the opium kings. Risking a bold comparison with the narco-capitalism of the late twentieth century, Thilly envisions Xiamen as a ‘maritime plaza’, comparable to today’s globalized drug hubs where the Colombian and Mexican cartels operate.
In his conclusion, Thilly clearly establishes the multifaceted collusion between the state and the opium trade. This complicity abolished the distinctions that had been sought between the legal and the illegal, public and private, bribery and taxation, and revenues and profits. In so doing, Thilly offers a striking analysis of the mechanisms of corruption, which are transformed into informal taxation and market regulation: there can be no success in marketing drugs without sharing the profits with the state. In this respect, the Fujian merchants’ familiarity with the different tax-farming systems practised in South East Asia proved decisive in helping the government set up a system of opium taxation. The result was a de facto privatization of authority in the process of regulating and taxing opium production and marketing.
The above-mentioned series of confusions runs through the different periods covered by the book: a time when the great Fujian lineages were negotiating permanent tax regimes with the maritime authorities, and when the opium kings had acquired the right to tax and regulate the traffic. This was also true when opium had become a crucial resource for the Japanese operating in China, for the warlords and for the prohibition bureaus controlled by the Guomindang. The drug magnates became untouchable thanks to abundant capital, multiple citizenship and the protection afforded by the Japanese.
The Opium Business is a timely addition to the works by Xavier Paulès on opium, alongside those by Leonard Blussé, Paola Calanca and Xing Hang on Fujian 3 and its maritime history, but it is also an innovative work that enriches our understanding of the particularities of the Chinese political economy from the end of the empire to the Japanese defeat in 1945.