1. Opium Wars 1839～1842; 1856 ~ 1860 鸦片战争 【Yāpiàn Zhànzhēng】
The First Sino-British Opium War
A Three-way trade: China, India (source of opium) and Britain
The Second Sino-British Opium War
“the Anglo-French expedition to China”
“To mend treaties” for more gains

2. Balance of Trade
Positive for China as it sold its tea, silk, ceramics, etc.;
Negative later as a result of the war
Negative for British at first

3. The Balance of Trade
Chinese tea has become a daily necessity in British life;
Tea imports reached 15 million pounds in 1785 and doubled in the decade preceding the first Opium War
The British government collected 10% tax and duty on Chinese tea.
The British function as middleman to resell tea at a different price;
1820 to 1830
Large quantities of silver seemed to have left China to pay for opium imports;

4. The Balance of Trade 贸易顺差【màoyìshùnchā】 trade surplus.
顺差【shùnchā】 favourable balance; surplus.
贸易逆差【màoyìnìchā】 adverse balance of trade; trade deficit.
逆差【nìchā】 <trade> adverse balance of trade; trade deficit.

5. Monopoly
The Cohong, often spelled as kehang or gonghang, was the Chinese import-export monopoly in Guangzhou (also called Canton) during the Qing dynasty (1644–1911).
East Indian Company (John Company, headquarter in London)
1600--Royal charter/
Letters patent
Robert Clive, first British Governor of Bengal
Feature of (British) colonization: wedge/foothold/
interested in resources,
Straw to get your milkshake—remote control
“There Will Be Blood”
The Canton System ( ) served as a means for China to control trade with the west within its own country. Seen from the European view, it was a complement to the Old China Trade.
Despite Chinese efforts to keep European traders and citizens within the area of Macau, European trade spread throughout China. The Canton System limited the ports in which European traders could do business in China. It also forbade any direct trading between European merchants and Chinese civilians. Instead, the Europeans, generally employees of major trading companies (most importantly the English East India Company) had to trade with an association of Chinese merchants known as the Cohong. The European (soon to include American) presence was restricted to the Thirteen Factories on the harbour of Canton (Guangzhou) during the trading season, but the foreign traders were permitted to remain on Chinese soil at Macau in the off-season (a mitigation of earlier Chinese restrictions on trade, which had banned foreign residence in the off-season).
The first trade that existed with China was for silks, porcelain ("fine china") and most lucratively tea. It was the incredible financial deficit caused by the European demand for tea that spurred the British to begin importing opium (grown in its colonies in India) - the only commodity besides silver bullion that the Chinese merchants would accept in bulk.
Despite Britain's growing apprehension with the Canton System, the selling of opium appeased British resentment for the system, and it remained intact until the Opium Wars, which established "treaty ports" in accordance with the Treaty of Nanjing, which were ruled not by Chinese laws but rather the laws of the specific country that controlled each port.
Bengal
–noun
1. a former province in NE India, now divided between India and Bangladesh. Compare East Bengal, West Bengal.
2. Bay of, a part of the Indian ocean between India and Burma (Myanmar).
3. a raw silk from Bengal.

6. Monopoly in Trade
The East India Company until 1834 when the British parliament abolished its monopoly;
Used to be connected by a trade-and-payment Triangle among India, China and Britain;
Cohong
The cohong was a Guild of merchants that was authorized by the Chinese Central Government to handle trade, particularly rights to trade tea and silk, with the West. They were the only group at the time to authorize this, making them the main controllers of all foreign trade in the nation.

7. British Expansion
Combination of an expanding industrial economy, in need of raw materials and markets for its goods
Coupled with the assertive free-trade ideology
Created the conditions for the emergence of Western imperialism, led by the British in the 19th century

8. The Wealth of Nations Adam Smith, 1776
Smith argues that governments should refrain from intervention in the economy as much as possible and allow markets to function freely
“Invisible hand”
In economics, the invisible hand, also known as invisible hand of the market, is the term economists use to describe the self-regulating nature of the marketplace.

9. When pursuing wealth, an individual can create jobs for others
It is true
Jobs are created for thousands of people;
How about distribution of wealth?
Compare salary/wage discrepancies between an employee and the owner of the business

10. Marxist Theory Capitalism is effective in accumulating wealth;
The secret of capitalism lies in pocketing surplus value剩余价值
This is not entirely accurate;
Reinvestment
Expansion
When to stop?
When an owner goes bankrupt, it is quite different from an employee…

11. Economic liberalism
Economic liberalism is an economic philosophy that supports and promotes laissez-faire economics. Proponents of economic liberalism believe political freedom and social freedom are inseparable with economic freedom, and use philosophical arguments promoting liberty to justify economic liberalism and the free market. It opposes government intervention in the free market, and supporting the maximum of free trade and competition
laissez-faire
–adjective of, pertaining to, or conforming to the principles or practices of laissez faire.
–noun
1. the theory or system of government that upholds the autonomous character of the economic order, believing that government should intervene as little as possible in the direction of economic affairs.
2. the practice or doctrine of noninterference in the affairs of others, especially with reference to individual conduct or freedom of action.

12. If an action of pursuing something were Unleashed
Under the pretext of free trade, British invaded China
When Nurhaci seeking justice, spurred by his “seven grievances,” how many grievances did the Manchus do to Chinese?
Likewise…

13. Confucius’ Teachings
Inward, self examination three times a day to become a gentleman
“Do not do unto others what you would not have them do unto you.” (East Asia 33)
Make a list of what you don’t like to be done to you from others

14. Free Traders or Drug Dealers?
Justification from the British Parliament: to protect personal property; to promote free trade
Adam Smith
The Wealth of Nation (1776)
Not a drug dealer?
British superiority

15. Zhuangzi’s Parable
A merchant in the Song State went to Yue state to sell his hats; To set off the beauty of those hats, one needs abundant hair as background;
Yue people, tattooed and hairless on their heads, had no need for hats
A blind spot in his market research or narcissism?
When could economic liberalism be justified?
Sell anything that makes money?
To drug a nation by opium?

16. Irony of outsourcing Merit of outsourcing Consequences of outsourcing
Down payment 30%
Return on capital (ROC)资金回笼
account receivable
Quality control
Return on capital (ROC) is a ratio used in finance, valuation, and accounting. The ratio is estimated by dividing the after-tax operating income (NOPAT) by the book value of invested capital.
This differs from ROIC. Return on invested capital (ROIC) is a financial measure that quantifies how well a company generates cash flow relative to the capital it has invested in its business. It is defined as net operating profit less adjusted taxes divided by invested capital and is usually expressed as a percentage. In this calculation, capital invested includes all monetary capital invested: long-term debt, common and preferred shares.
When the return on capital is greater than the cost of capital (usually measured as the weighted average cost of capital), the company is creating value; when it is less than the cost of capital, value is destroyed.
[edit] ROIC formula
Note that the numerator in the ROIC fraction does not subtract interest expense, because denominator includes debt capital.
资金回笼就是在公司开始经营运转中，总有相应的财务支出，要经过一段时期这笔支出才能收回。在这期间，已经开始了从投资、生产、库存到销售的经营运作过程，在这一阶段中，投入的资金会以各种各样的形式出现，因此存在着技术和经济贬值的风险。投入的资金直到一段时间之后才能重新收回，每个公司都希望能够尽快收回初始投资，并获得相应的资产增值，以保证企业的支付能力不受损害，随时都能支付每一笔应付的款项。因此，企业要经常关注资金的运作和管理，以尽快回笼资金，实现公司的持续发展和经营。 　　销售资金回款率=（（销售收入+应收帐款期初数-应收帐款期末数）/销售收入）*100% 　　销售资金回款=销售收入+应收帐款期初数-应收帐款期末数

17. Kowtow or not to Kowtow? Cultural Misunderstanding
East Asia
Lord Macartney saluting the Qianlong Emperor, 1793.
Arrogance on both sides
1792/1816, British visitors cold shouldered
Qianlong said we don’t need anything from you…

18. To Kowtow or Not to Kowtow. http://v. youku
See an episode in a TV series entitled
Chancellor Hunchback Liu, 1994
Kneeling down three times
Kowtow 9 times
Lord Macartney was confident that the Chinese would perceive that superiority which Englishmen, wherever they go, cannot conceal…
Role play: kowtow or a regal bow?

19. unwilling to function within the parameters of Qing "Guest" ritual

20. Lord George Macartney (14 May 1737 – 31 May 1806)
He is often remembered for his observation following Britain's success in the Seven Years War and subsequent territorial expansion at the Treaty of Paris that Britain now controlled "a vast Empire, on which the sun never sets".

21. The Macartney Embassy
The Macartney Embassy, also called the Macartney Mission, was a British embassy to China in The Mission ran from 1792–94 . It is named for the first envoy of Great Britain to China, George Macartney, who led the endeavour. The goal of the embassy was to convince Emperor Qianlong of China to ease restrictions on trade between Great Britain and China by allowing Great Britain to have a permanent embassy in Beijing, possession of "a small unfortified island near Chusan (now Zhoushan) for the residence of British traders, storage of goods, and outfitting of ships", and reduced tariffs on traders in Guangzhou.
Not interested in territory, but in trade and a foothold and resources in China.

22. Qianlong 1711—1799
In 1793, the Macartney mission arrived in Beijing under the pretext of congratulating on Qianlong’s 83rd birthday;
Qianlong responded the the English monarch by praising his “respectful spirit of submission”;
Labeled British side as paying “tribute”
“We possess all things…”

23. The Burning of Opium (East Asia 378-382) Lin Zexu (1785 –1850)
In Tao Te Ching, Laozi states that “Governing a large state is like boiling a small fish.” Laozi, Tao Te Ching. Trans. by D. C. Lau. (1963; rpt. Hong Kong: The Chinese University Press, 2001), (60)

24. Other Alternatives instead of Escalating the Tension?
In Tao Te Ching, Laozi states that “Governing a large state is like boiling a small fish.” Laozi, Tao Te Ching. Trans. by D. C. Lau. (1963; rpt. Hong Kong: The Chinese University Press, 2001), (60)
Over-reaction or under-reaction?

25. Alternatives for Lin Zexu?
Instead of burning opium by the Chinese side, turn it over to British?
Double-edged sword: diplomacy and military supremacy
Qing’s bannermen are no match/no strong navy
The art of management: Management needs to be done at the source, not at the end result;
20/80 rule, importance of leadership training;
Too bad there was no MBA program at the time

26. The British parliament debate
Free trade or drug dealing?
A drug cartel, an international syndicate, combine, or trust formed especially to regulate prices and output in some field of business.

27. Henry John Temple, 3rd Viscount Palmerston instrumental at the Opium Wars
He is best remembered for his direction of British foreign policy through a period when the United Kingdom was at the height of its power, serving terms as both Foreign Secretary and Prime Minister. Some of his aggressive actions, now sometimes termed liberal interventionist, were greatly controversial at the time, and remain so today.

28. Benjamin Disraeli vs. Lord Palmerston self-defense for his foreign policies
I hold that the real policy of England... is to be the champion of justice and right, pursuing that course with moderation and prudence, not becoming the Quixote of the world, but giving the weight of her moral sanction and support wherever she thinks that justice is, and whenever she thinks that wrong has been done. --Palmerston
Henry John Temple, 3rd Viscount, 1784–1865,  British statesman: prime minister 1855–58, 1859–65.

29. China under attack The First Battle of Chuenpee[2] was fought between British and Chinese ships at the entrance of the Bocca Tigris, China, on 3 November 1839
The picture shows The Nemesis destroying Chinese war junks during the Second Battle of Chuenpee穿鼻, 7 January 1841
The Bocca Tigris, Bogue, or Humen (Chinese: 虎门; pinyin: Hǔmén, literally: "tiger gate") is a narrow strait in the Pearl River Delta, Guangdong, People's Republic of China, where the Pearl River discharges into the South China Sea. The strait is formed by the islands of Chuenpee and Anunghoy on the eastern side and Tycocktow on the western side. Since 1997, the strait is crossed by the Humen Pearl River Bridge.

30. Charles Eliot first British administrator of Hong Kong
Elliot wrote to Foreign Secretary Lord Palmerston in 1839 that he regarded the opium trade as a "disgrace and sin ... I have steadily discountenanced it by all the lawful means in my power, and at the total sacrifice of my private comfort in the society in which I have lived for some years past."

31. Different perspectives
China side:
Burning opium is justifiable as it has ruined Chinese labor market and economy;
Millions of Chinese became additive;
Opium became a recreational drug (378)
British side:
Violation of personal property

32. Addictive to Opium Opium has long been used for medicinal purposes
Smoking or inhaling fumes started in the 17th century;
The drug was habit forming;
Withdrawal was excruciatingly painful;
Human resources were ruined in China; silver dollars flow back to British;

33. Unequal Treaties
In 1842, the Daoguang 道光 Emperor entrusted Qiying 耆英 to conclude a peace treaty with Britain following the First Opium War, and he was chiefly responsible for negotiating and signing the Treaty of Nanking with the British on 29 August It set the pattern for later treaties known as the "Unequal Treaties" in China.

34. Treaty of Nanjing (Aug. 29, 1842) Nanjing
treaty that ended the first Opium War, the first of the unequal treaties between China and foreign imperialist powers. China paid the British an indemnity, ceded the territory of Hong Kong, and agreed to establish a “fair and reasonable” tariff. British merchants, who had previously been allowed to trade only at Guangzhou (Canton), were now permitted to trade at five “treaty ports” and with whomever they pleased (see Canton system).

35. Signing of the Treaty of Nanking August 29, 1842 , Temple of Jinghai,静海寺 Sir Henry Pottinger vs. Qiying

36. The main content of the Nanjing Treaty
Cession of Hong Kong
Open four port cities: (Guangzhou), Fuzhou, Xiamen, Ningpo, Shanghai;
Indemnity: The total sum of 21 million ounces of silver to be paid in installments over three years and the Qing government would be charged an annual interest rate of 5 percent for the money that was not paid in a timely manner (Article VII).
中英两国停战并締結永久和平及對等关系。
中国开放沿海的广州、福州、厦门、宁波、上海五处港口，进行贸易通商。
中国将香港岛让予英国治理。[2]
中国向英国共赔偿二千一百万西班牙银元。
中英两国各自释放对方军民。
英军撤出南京、定海等处江面和岛屿。

37. Reparations imposed on China since 1942 (East Asia 388) in the name of justice Traders or Invaders?
1. the making of amends for wrong or injury done: reparation for an injustice.
2. Usually, reparations. compensation in money, material, labor, etc., payable by a defeated country to another country or to an individual for loss suffered during or as a result of war.
3. restoration to good condition.

38. Consequences of the First Opium War
1. Reduced China to a semi-feudal/semi-colonial country;
China’s territorial integrity was breached;
2. Lost Hong Kong to British;
3. Established the Principle of Extraterritoriality;
4. rid of monopoly of Cohang, a guild in Canton, authorized by the Qing Government
5. The Treaty of Nanjing set the pattern for other unequal treaties;

39. International Extradition 引渡【yǐndù】 extradite.
Extradition is the official process whereby one nation or state surrenders a suspected or convicted criminal. Between nation states, extradition is regulated by treaties.
Which country has the right to execute a “guest” criminal?

40. Consequences
Hong Kong was surrendered to the British, giving the British a base for further military, political and economical penetrations of China. The surrender of Hong Kong breached China's territorial integrity.
The Treaty stated that all custom duties must be negotiated with other countries. It therefore took away China's control of its own customs. Furthermore, the import duties were lowered from 65% to 5%, this effectively shattered China's home industries.

41. Open-mindedness & Stability/Prosperity
Tang Dynasty
618–907
Has established a China-led cultural circle in Asia
Chinese political system and cultural practices influenced Japan, Korea, etc.
Qing Dynasty
1644–1911
Adopted a close-door policy, living in isolation

42. Where Is the Center of the Universe?
Underlying the tension between China and the West was the incompatibility of the Chinese and Western views of themselves and the world;
Greek: Delphi refers to the point where the heaven and earth meet;
Far East: From the Western point of view, China is not the center of the world;
The Central Kingdom: Chinese view of themselves

43. Archaeological Site of Delphi

44. Sitting Posture in Ancient China
Sitting on one’s heels;
To show more respect, lift up the upper part of the body in pure kneeling position—”long kneeling”;

45. The Second Opium War 1856 to 1860 British side:
To maintain the “most favored nation” status in foreign trade
Burdened with India,
Trade, not territory, was its aim?
It demanded a base in China: Hong Kong;
Under the pretext of mending the Treaty of Wangxia, 1844
The Arrow Incident
On October 8, 1856 Qing officials boarded the Arrow, a Chinese-owned ship that had been registered in Hong Kong and was suspected of piracy and smuggling. Twelve Chinese crew members were arrested on suspicion of piracy by the Chinese authorities.

46. French Involvement
The French Empire, the United States, and the Russian Empire received requests from Britain to form an alliance.
France joined the British action against China, prompted by the execution of a French missionary, Father August Chapdelaine ("Father Chapdelaine Incident"), by Chinese local authorities in Guangxi province.