ABSTRACT
Before the mid-nineteenth century, Western trade with China was limited to the ports of Macao and Canton, and only members of the exclusive Cohong, a small group of authorised merchants whose financial and commercial resources were strictly limited by the Chinese government,4 were permitted to undertake transactions with foreign traders. T he limited demand for Western goods in China was in considerable contrast to the large local market for opium. The attempts of the Chinese government to restrict opium imports led to conflict with Britain, which imposed the Treaty of Nanking in 1842; by this treaty Hong Kong was ceded to Great Britain and the treaty port system inaugurated. Later treaties opened China further to Western commerce. The port of Shanghai became one of the most important and prosperous of the foreign settlements, especially with the development of the foreign trade of the Yangtse, whilst Hong Kong became the centre of the entrepot trade of south China generally.
