Cohong system

Definition

The cohong system was a trade organization established in Canton (Guangzhou) during the Qing Dynasty that regulated foreign trade with Western merchants. This system allowed only a select group of Chinese merchants, known as cohong, to conduct business with foreign traders, creating a highly controlled and restrictive environment for commerce. The cohong system facilitated the Qing government's efforts to manage trade, maintain stability, and control the influx of foreign goods and influences.

5 Must Know Facts For Your Next Test

1. The cohong system emerged in the 18th century as a means for the Qing Dynasty to control foreign trade and limit Western influence in China.
2. Under the cohong system, foreign merchants were restricted to trading through designated Chinese merchants who were responsible for all transactions and negotiations.
3. The system created a monopoly for the cohong merchants, allowing them to profit significantly from foreign trade while maintaining the Qing government's tight control over commerce.
4. As demand for opium grew among Chinese consumers, the limitations of the cohong system contributed to tensions with British traders, leading to the Opium Wars.
5. The cohong system was eventually dismantled after the Treaty of Nanking in 1842, which ended the First Opium War and opened several ports to foreign trade beyond Canton.

Review Questions

• How did the cohong system impact trade relationships between China and Western merchants during the Qing Dynasty?
  • The cohong system significantly impacted trade relationships by creating a controlled environment where only a select group of Chinese merchants could engage with Western traders. This limited access restricted competition and allowed cohong merchants to leverage their position for profit while ensuring that the Qing government maintained authority over foreign commerce. The restrictions also fostered resentment among foreign traders, who were frustrated by their inability to negotiate directly with Chinese suppliers.
• Evaluate the reasons behind the establishment of the cohong system and its effectiveness in managing foreign trade.
  • The cohong system was established primarily as a means for the Qing Dynasty to regulate foreign trade and minimize Western influence in China. By limiting interactions to designated merchants, the Qing aimed to control both trade practices and the types of goods entering China. While it was effective in maintaining order initially, the increasing demand for opium and subsequent tensions with Western powers highlighted its limitations and ultimately led to conflict, revealing that stricter controls could not suppress emerging market dynamics.
• Assess how the decline of the cohong system influenced subsequent changes in China's trading practices with foreign nations.
  • The decline of the cohong system marked a pivotal shift in China's trading practices, particularly following its dismantling after the Treaty of Nanking. This transition opened up multiple ports for foreign trade and initiated a more competitive environment for commerce that included a wider range of international actors. The end of such restrictive practices allowed Western powers greater access to Chinese markets and resources, fundamentally altering China's economic landscape and leading to increased interactions that would shape its modernization efforts in later years.

Related terms

Canton System:

A set of regulations governing trade in Canton, which limited foreign merchants to this single port and established specific practices for trade with China.

Qing Dynasty:

The last imperial dynasty of China, ruling from 1644 to 1912, known for its expansion and consolidation of power.

Opium Wars:

Conflicts between Britain and China in the mid-19th century, primarily over trade issues including the opium trade, which led to significant changes in China's foreign relations.