Introduction e crisis of 1779-80 arose from loans that had been made by private European lenders to Chinese merchants over approximately the een preceding years. e crisis arose in Canton, the locus of a burgeoning trade that was both con- ned to that port and closely regulated by the Qing government. e centres of power – political and economic, in Europe and in China – were far away. e crisis broke at a vortex of monopolies, yet it had nothing to do with monopoly. e borrower hong merchants were licensed by the Chinese government to conduct maritime foreign trade on a monopoly basis. e lenders, private parties or their agents, all had some connection with the European East Asia Companies. e era of these behemoths was not yet over, but their in uence was waning. In this crisis, the great companies had no direct connection with the loans that had
been made, and depended on the Chinese debtors in order to carry on foreign trade. For the most part, they viewed the private foreigners who lent and did other business in their shadow as an irritant. Yet the future would be seized by the private traders. e loans themselves were doubly illegal under Chinese law, which had prohibited lending to hong merchants since 1760, and also barred collection of any interest in excess of the principal amount advanced. From a Western viewpoint, this con ict had little to do with standard conceptions of pro t, as in the context of the fruits of the land or even of industrial investment. It arose in part due to a bottleneck in the then novel business of the repatriation of capital to Europe by means of credit bills issued by the East India Companies.