During the eighteenth and early nineteenth centuries, no entity was more important to the commercial relationship between China and the West than the Hong merchants. They served as the exclusive intermediary between two economies. So powerful were they that Britain resolved to remove them, achieved by force during the First Opium War (1839–1841). In the eyes of historians, the Hong merchants were a group of parasites feeding off the imperial Canton system. It was said that they lacked flexibility and independence, and that they failed to adapt to radically changing international realities in the first half of the nineteenth century. Such readings prevailed in both academic and popular accounts.
Challenging convention, John D. Wong offers a fresh and distinctive take on Hong merchants in Global trade in the nineteenth century. In addition to the introduction and conclusion, the book consists of six chapters. The first chapter recreates the context against which the Wu family and its firm emerged. The second chapter shows how Wu Bingjian (known as Houqua) handled the new challenges brought by the mounting influence of British merchants in the global economy. Wu succeeded in deepening the East India Company’s dependence upon him for tea, though the latter had tried to avoid such a situation. Another strategy that Wu adopted to contain the expansion of the British company was to found his own commercial corporation in concert with some American merchants, the subject of Chapter 3. Chapter 4 explores how Wu cultivated the trust of his American partners, permitting him to extend his trade network into the United States. Chapter 5 examines how the partnership between the Wu family and its American friends continued after the death of Wu Bingjian in 1843, and the way in which it shifted due to the demise of the Canton system. Chapter 6 discusses how the large sum of capital that Houqua invested in his American partners’ firm supported its operations until 1891.
Until now, scholars in both China and the West have given little attention to the concrete details of commercial interactions between the Hong merchants and their European counterparts. As a result, no-one has questioned the traditional picture. By detailing the transactions and the relationship between Houqua and the Westerners, Wong gives the lie to the traditional portrait. He notes that, in the early nineteenth century, there was a growing imbalance in the relationship between Canton and the foreign traders. But, in his example, the Hong merchants reclaimed the advantage by acting realistically and flexibly. The victory of the Houqua firm over its British counterparts provides powerful evidence. Although the East India Company was the major exporter of Chinese tea and thus got the upper hand in the trade, the strategies adopted by the Houqua firm obliged the British traders to make a series of concessions.
Wong highlights the ambitious and complex plans applied long term by the Hong merchants to expand their business in global networks. In the early nineteenth century, Houqua noticed the presence of American merchants competing with British in Canton. He soon chose to collaborate with them as a cushion against the pressure from the East India Company. The corporation gradually developed into a stable, safe, and trustful relationship. It was through this channel that Houqua made several bold investments in America, according to Wong; they proved quite profitable. In addition, the alliance provided the Hong merchants with a new way of protecting their fortunes from the exactions of the Manchu government. More importantly, while the Hong merchants lost their livelihood when the Nanjing Treaty abolished the Canton system, Houqua’s descendants found that the interest paid on Wu Bingjian’s American investments still provided them with a stable source of income. Wong’s fine analysis clearly shows that at least one Hong merchant managed to play an active role not only in Canton but also in the global economy.
Wong has reconceptualized the role that the Hong merchants played in the global economy by scrutinizing overlooked long-term personal ties linking them and their American partners. Such an approach is fresh and persuasive. Still, by devoting so much attention to personal interactions, Wong runs the risk of underestimating the contribution of the Canton system itself. His analysis of the latter is not as strong or as sustained as the subtitle of his book hints. Furthermore, in this area he subscribes to the traditional view of the Canton system as nothing but an obstacle to foreign trade. In fact, the changes made to that system provided the institutional channel through which the Hong merchants, including Wu, developed personal ties with Westerners. No matter how corrupt the Canton system was, it proved that the court was willing to give up direct control over overseas trade, unthinkable before the late Ming. Left to handle foreign trade, the Hong merchants dealt with foreign merchants as they saw fit. The Canton system, which worked efficiently until 1840, facilitated the creation of a corporation by the Hong merchants and their Western partners, a crucial prerequisite for the global success of Wu’s firm.
In short, Wong’s book brilliantly demonstrates that the Canton system and the Hong merchants, two groups much studied by previous scholars, remain a valuable mine from which historians can still excavate fresh insights advancing our understanding of the relationship between nineteenth-century China and the global network.
