One of the most disgraceful episodes of the 19th century was the Chinese Opium Wars. Dazzled by the prospect of an enormous market, Britain force-fed China with Indian opium, deliberately creating millions of addicts to swell the profits of its merchants. When the Chinese resisted, Britain crushed them. William Gladstone, later to become Prime Minister, declared that if there had ever been "a war more unjust in its origin, a war more calculated to cover this country with permanent disgrace, I do not know". Almost forgotten in the West, the humiliation still rankles in China. There are abundant lessons for contemporary attempts to deal with the international drug trade in this story.

Today’s international drug control system is rooted in efforts made a century ago to address the largest substance abuse problem the world has ever faced: the Chinese opium epidemic. At the turn of the century, millions of Chinese were addicted to opium, which was freely traded across borders at the time. China’s attempts to unilaterally address the problem failed, and it was not until the first international agreements were reached that a solution became possible. The story of the Chinese opium problem and the international reaction it engendered represents the seminal chapter in global efforts to control substance abuse.

The use of opium for medicinal and recreational use is documented in antiquity. The Sumerians referred to it as ‘Gil Hul’ or ‘joy plant’ as early as 3000 BC and its use is documented in the Near and Middle East across the centuries. The exact date that opium was introduced to China is unknown, but there seems to have been some domestic production as early as the 11th century AD. Before the 19th century, though, China imported most of its opium, and until the final centuries of the last millennium, the drug remained too expensive for popular use.

In contrast, a nearby empire had, by the 16th century, expanded production to the point that a lucrative export trade began to develop – India. Recognising its economic potential, the Mogul empire introduced a state monopoly on the production and distribution of opium around the time of Akbar the Great. This monopoly was later resurrected by the British East India Company when they took control of the country, as discussed below.

The impact of the opium trade was dramatically altered by the introduction of a new method of ingestion – smoking – at the end of the 17th century. This habit, linked with the spread of tobacco smoking, presented greater addiction potential than when the opium was eaten, the traditional means of consuming the drug. In contrast to India, where opium eating had a long history, smoking proved popular in China, and this may be one reason why the drug proved far more problematic for the latter than the former. Both the tobacco and opium trades in Asia were controlled in this era by the Dutch East Indian Company, which took over the Portuguese trading posts in India in 1602.

Early addiction

Opium use spread rapidly along the coastal areas of China in the 17th century, and the first wide-scale opium addiction problem was detected in the port of Amoy (Xiamen) in Formosa (Taiwan) in 1683. In response to rising addiction levels, Chinese emperor Yongzheng issued a decree banning the import and sale of opium in 1729, threatening violators, inter alia, with confiscation of their ships. Around 13 tonnes (a tonne is 1000 kilograms) of opium were imported into China at the time. The ban was initially vigorously enforced, and had the effect of both slowing the spread of the problem and dramatically increasing prices. It also marked the beginning of the opium smuggling industry.

Chinese vigilance dropped in the second half of the 18th century, and illegal imports of opium into China doubled as compared to six decades earlier. This prompted the Chinese emperor Jiaqing to once again ban the smoking of opium in 1796 and its importation in 1800. Opium was also banned in several other South-East Asian countries by the beginning of the 19th century, including Siam (Thailand), Burma (Myanmar) and Vietnam, as well as in parts of Java and Sumatra (today’s Indonesia).These bans encountered tremendous resistance from European traders intent on penetrating Asian markets.

Aggressive marketing

Chinese addiction did not reach epidemic proportions, however, until the end of the 18th century, when the lion’s share of the trade fell into the hands of the British East India Company. Founded in 1600, the British East India Company was given monopoly privileges by the Crown on trade with the East Indies. The British first arrived in China in 1637 and in 1715 were allowed to open a trading station in Canton. But they only began to aggressively market opium after they took control of the main opium producing areas of India in the mid-18th century.

The Battle of Plassey in 1757 pitted a chartered company, the British East India Company against the Nawab of Bengal, and the Company’s victory is seen as the beginning of two centuries of British rule in India. It also secured for the Company the main opium producing areas of India (Bengal and Bihar). In 1773, the Company claimed monopoly rights on the opium trade in order to fund the rising military expenditures associated with conquering the rest of the subcontinent. Since importing opium into China directly had been banned, the drug was sold in Calcutta to licensed merchants, who shipped the opium to British-owned warehouses in the free trade area in Canton (Guangzhou). From here, the opium was smuggled by Chinese traders – often with the help of corrupt customs officers – outside the British zone and to the rest of the country.

The British East India Company was thus able to deny responsibility for importing opium and retain its other trading rights with China. Opium was also shipped to other locations along the Chinese coast but outside territorial waters, where it was smuggled into the country aboard local boats.

Fed by this trade, India became the world’s largest opium producer by the beginning of the 19th century. By the end of the 18th century, nearly a third of Bengal’s opium production was exported to Southeast Asia and China. In 1729, around 13 tonnes were exported to China, increasing to around 64 tonnes by 1767 and over 115 tonnes by 1798. But the real expansion of the opium trade only started after 1820, when the British East India Company began to lose its grip on its monopoly – a process that started in 1813 and was completed by 1834.

Under the monopoly, it made sense to limit production in order to keep prices high. Once the monopoly disappeared, sales and profits of merchants were optimised by much higher levels of production. In order to prevent potential competition from Turkey and Persia – who were attempting to penetrate the Chinese market with the help of US merchants – production of opium in India was drastically increased. The area under opium poppy cultivation in Bengal (India), for instance, was increased from about 36,400 hectares in 1830 to 71,200 hectares by 1840 and close to 200,000 hectares by 1900.

As a consequence, opium prices fell drastically. Expressed in Spanish silver dollars, the price of a chest of opium from Patna (Bihar) fell from $2,500 in 1822 to $585 in 1838. This enabled a larger proportion of the Chinese population to become addicted to opium, resulting in much higher sales volumes.

Despite the Chinese opium ban, opium exports from India to China rose from just 75 tonnes in 1775 to just under 300 tonnes by 1800 and more than 2,500 tonnes by 1839. The opium trade became so important that traditional ships were no longer sufficient to bear the volume of the flow. They were superseded in the 1830s by specially designed ‘opium clippers’ which were heavily armed to protect their high-value cargo from pirates (or the Chinese authorities) and much faster than traditional ships, reducing transport time by two-thirds. Instead of making one trip from India to China and return per year, opium clippers could make three trips, from either side of India, and were thus able to transport ever larger quantities of Patna and Malwa opium to China.

Opening the Chinese market

Opium proved to be the wedge the Western powers had been seeking to prise open the Chinese market, which had heretofore proven nearly impenetrable. China had many things the West desired, such as silk and porcelain, but wanted little the West could provide, and a massive trade imbalance resulted in the rapid growth of Chinese silver reserves. The opium trade slowly shifted this balance, with long term implications for the Chinese economy and society.

The Chinese authorities attempted to react to this situation by cracking down on opium imports. Following the first edict of 1729 and the edict of 1799, the Chinese Emperor decreed even stricter laws against the importation and sale of opium in both 1814 and 1831, though without much success. Opium addiction began to capture members of the upper classes and a growing number of high-ranking military officers. Corruption also spread. By 1839, tensions between China and the foreign interests that were pumping opium across its borders had reached crisis proportions, and the Opium Wars were the result.

While other issues dogged Sino-British relations in the early 19th century, the opium trade played a key role in the conflicts to come. In 1839, the emperor issued an edict ordering the seizure of all the opium in Canton, including that held by foreign governments. British traders alone lost 20,283 chests of opium (around 1,300 mt), without compensation. For comparison, annual imports of opium into England amounted to less than 300 chests or 18-20 tonnes a year at the time. The British response was to attack the Chinese coast, with the navy taking Canton and other towns up the Yangtze river. Defeated, the Chinese were forced to sign the Treaty of Nanking in 1842, ceding Hong Kong to the British, opening five new ports to foreign trade, and paying a hefty indemnity. The opium trade itself was not dealt with in the treaty. Opium remained officially illegal in China, but the Chinese authorities were left with very little scope to combat the trade, particularly where foreign interests were concerned.

The Chinese smugglers quickly took advantage of this awkward situation, having their vessels registered in Hong Kong as British ships in order to deter official interference. This charade was the basis for the second Opium War, when, in 1856, a Chinese craft flying the British flag was seized for involvement in piracy and smuggling. Once the ship was taken to port, the Chinese crew was arrested and the English flag was torn down. The British navy, supported by French troops, retaliated, ultimately taking Beijing and burning the imperial summer palace. In the resulting treaty of Tientsin in 1858, China was, inter alia, forced to fully legalize the importation of opium.

A nation of addicts

With the legal impediments finally removed, opium flooded into a hungry Chinese market. Opium imports from India rose from some 2,500 tonnes at the time of the outbreak of the first opium war in 1839 to 6,500 tonnes by 1880. While British India remained the key supplier, the Chinese also consumed significant amounts of opium produced in Turkey, Egypt, Persia, and the Balkans. Forced to legalise importation and facing dwindling foreign reserves, the Chinese were compelled to reconsider the question of domestic opium production. Provincial authorities began to permit, and tax, domestic opium cultivation, despite the fact that the practice was kept officially illegal by the central government until 1890. This policy quickly began to show results – overall opium imports appear to have halved between 1880 and 1908; legal opium imports fell by more than third, with serious consequences for the opium related income of British India. While in 1880, opium-related income represented 14 percent of aggregate revenue of India, the proportion fell to 7 percent by 1905. Between 1894 and 1905 opium-related income declined from around £5 million to £3 million.

In comparison, duties on opium imports and transit taxes on foreign opium in China amounted to about 5-7 percent of the central government’s total revenue over the 1887-1905 period. After the Chinese Government levied a consolidated tax on both foreign and domestic opium in 1906, income almost tripled, equivalent to around 14 percent of the annual central government income. Though this was a lower proportion than in several other Asian countries, it was still significant and appeared to be much needed in times of huge fiscal deficits. The de facto legalization of opium poppy cultivation at the provincial level led to a gradual increase in production, but all stops were removed when the practice was officially recognised in 1890, and production skyrocketed.

Even before the import ban was lifted, about 300 tonnes were produced in China. By 1880, domestic production was reported to have slightly exceeded imports. After legalisation, opium production in China exploded, peaking in 1906 at a record high of more than 35,000 mt, according to the Chinese delegation to the International Opium Commission of Shanghai in 1909.

Thirty-five thousand tonnes is an enormous amount of opium by any standard. Afghanistan, which produces over 95 percent of the world’s illicit opium today, generated less than 9,000 tonnes in 2007. British-India produced some 6,350 tonnes at its peak in 1880. Facing Chinese import-substitution, this diminished to 4,445 by 1905, of which 3,240 tonnes were exported to China.

Production was reported from 20 Chinese provinces. More than 40 percent of the total production took place in the province of Szechwan, followed by Yunnan. Yunnan province is located in southern china, bordering Myanmar, and Szechwan province is located north of Yunnan. In other words, more than half of China’s opium production took place slightly to the north of the geographical area which would later be known as Golden Triangle (Myanmar, Laos and Thailand), one of the main sources of illicit opium in the 20th century.

The prevalence of opium consumption in China also skyrocketed in the 19th century, from about 3 million opium smokers in the 1830s, to 15 million opium addicts by 1890, or about 3 percent of the population at the time. According to the Chinese delegation to the International Opium Commission of Shanghai (1909), this increased to about 21.5 million by 1906. Others put the number close to 40 million people in 1890, or about 10 percent of the population, growing to unknown levels from there. According to official Chinese figures, opium consumption affected 23.3 percent of the male adult population and 3.5 percent of the female adult population of China in 1906. Other estimates ranged from 13 percent to 27 percent for the male adult population of the country. By any estimate, China was consuming between 85 percent and 95 percent of global opium supply at the beginning of the 20th century. Never before or since has the world known a drug problem of this scale and intensity.

Opium use also apparently affected Chinese population outside China. In the USA, for instance, some estimates suggested that 30 percent of adult males of Chinese origin were addicted to opium smoking. Even higher proportions were reported for Chinese living in a number of Southeast Asian countries.

This essay has been reprinted with permission from the 2008 World Drug Report.