EARLY AMERICAN TRADE WITH CHINA

“On September 3, 1783, Britain and the newly independent United States signed the Treaty of Paris, and Britain closed its West Indian islands to American traders”.[1] Due to this, American ships began to search for new foreign markets and shortly after the signing of the Treaty of Paris, the first American ship, The Empress of China, sailed up the Pearl River. The Empress reached Canton at the end of that summer, initiating direct trade between China and the new republic.[2]

The trade relationship between China and the then British colonies goes back to the 1600s. Americans were exposed to the many Chinese goods such as tea, silk, and porcelain through the British East India Company, which had a monopoly over eastern commerce. Historian Eric Dolin reports that “on the eve of the revolution, the Americans were consuming more than 1 billion cups of tea annually”.[3] At first, it was the wealthier Americans who could purchase china, porcelain, and other exotic Chinese goods. As the demand increased, the supply increased as well and the prices went down enough so even average Americans could afford these goods in their homes. After the revolution, American merchants started to trade independently in China but by the time the Americans got there “in 1784, the Chinese had already been trading with many Western European nations for well over 100 years”.[4]

The Chinese government was opened to trading with Westerners, however they weren’t very interested in some of the things they were offering. Therefore, American merchants had to find goods that the Chinese were interested in buying and one of them was silver. Silver was always in high demand in China because it was the country’s standard monetary metal and it wasn’t available in large quantities in China. However, the high silver demand resulted in a silver shortage. The Western countries also became involved in the illegal trade of opium, which led to the Opium Wars.  “The efforts of the Chinese government to stop this illegal trade resulted in the First and Second Opium War. The Chinese loss resulted in the Treaty of Nanking 1842 and Treaty of Wangxia in 1844 which opened additional ports to foreign trade including Xiamen, Fuzhou, and Shanghai”.[5] 

The author of “When America First Met China” believes that westerners had a lottery perspective when they looked at China: “They saw this huge, wealthy country just waiting for western goods. They thought, if we can just crack it open somehow, the Chinese are going to buy so much of our products that we’re going to be rich.”[6] In an interview with the author, Mr. Dolin he hopes to teach US citizens a few simple lessons that can help in relation to the US-China trade. He believes there are many misconceptions and a lot of things that Americans don’t know, particularly about the history. By looking at the past and realizing we have a long history tied to China can help us move into the future in a more positive way.   

PRESENT DAY

Today, China is one of the fastest growing countries economically and US relations with China are critically important for the future of the world politics. According to a peer-reviewed article entitled "International trade and US relations with China", “trade between the United States and China has expanded dramatically in the last three decades and its dual role as a major trading partner and a growing international rival generates substantial uncertainty about China’s future status as friend or foe.”[7] However, many economists agree that the exchange of goods and services leads to mutual financial gains, economic interdependence and better diplomatic relations between the two countries. One of the main obstacles in the China-US trade is the substantial deficit of import-export. Economists believe this to be due to “structural abnormalities on both sides as one party (China) under-consumes, over-saves, and over-produces while the other (America) over-consumes, under-saves, and has anemic export levels. The latter is further intensified by America's export controls on many high-tech (and potentially dual-use) items to China.”[8]

Although international trade between the US and China has always been controversial in nature, many reputable American economists reject the accusation that this trade has resulted in US job losses. They agree in fact, that this trade is mutually beneficial and it requires joined forces of economists and statesmen to work together in resolving the issues and improving the diplomatic and economic relationships between the two countries. 

Footnotes

[1] Goldstein, Jonathan. "Philadelphia's Old China Trade and early American images of China." Pennsylvania Legacies 12, no. 1 (2012): 6+. General OneFile (accessed December 13, 2017). http://link.galegroup.com/apps/doc/A394348489/ITOF?u=mlin_n_state&sid=ITOF&xid=10e3312f.

[2] "America and the China Trade." The Gilder Lehrman Institute of American History. April 29, 2015. Accessed December 03, 2017. https://www.gilderlehrman.org/history-by-era/global-history-and-us-foreign-policy/essays/america-and-china-trade.

[3] Nelson, Christina. 2013. "America's Early Trade with China." China Business Review 40, no. 1: 18. MasterFILE Premier, EBSCOhost (accessed December 13, 2017).

[4] Goldstein, Jonathan. "Philadelphia's Old China Trade and early American images of China." Pennsylvania Legacies 12, no. 1 (2012): 6+. General OneFile (accessed December 13, 2017). http://link.galegroup.com/apps/doc/A394348489/ITOF?u=mlin_n_state&sid=ITOF&xid=10e3312f.

[5] "America and the China Trade." The Gilder Lehrman Institute of American History. April 29, 2015. Accessed December 03, 2017. https://www.gilderlehrman.org/history-by-era/global-history-and-us-foreign-policy/essays/america-and-china-trade.

[6] Goldstein, Jonathan. "Philadelphia's Old China Trade and early American images of China." Pennsylvania Legacies 12, no. 1 (2012): 6+. General OneFile (accessed December 13, 2017). http://link.galegroup.com/apps/doc/A394348489/ITOF?u=mlin_n_state&sid=ITOF&xid=10e3312f.

[7] Fordham, Benjamin, and Katja Kleinberg. "International Trade and US Relations with China." Oxford Academic Journals. July 04, 2011. Accessed December 03, 2017. https://corvette.salemstate.edu:5848/fpa/article/7/3/217/1790307.

[8] Clarke, Ryan. "Expert analysis on Sino-US trade and currency issues in the United States: policy impacts and future directions." China: An International Journal 9, no. 1 (2011): 26+. Global Issues in Context (accessed December 3, 2017). http://corvette.salemstate.edu:2094/login?gwurl=http://link.galegroup.com/apps/doc/A252192365/GIC?u=mlin_n_state&xid=ed710929.