# Cohong

The Cohong, sometimes spelled kehang or gonghang, a guild of Chinese merchants or hongs, operated the import–export monopoly in Canton (present-day Guangzhou) during the Qing dynasty (1644–1911). During the century prior to the First Opium War of 1839–1842, trade relations between China and Europe took place exclusively via the Cohong – a system formalised by an imperial edict of the Qianlong Emperor in 1738. The Chinese merchants who made up the Cohong were referred to as hangshang (行商) and their foreign counterparts as yanghang (洋行，literally "foreign traders").

## Foundation and structure

In 1738, the Baoshang system was established. This system granted a number of Chinese merchants license to trade with Western merchants as long as they helped to collect duties from the Westerners, successfully aligning trading interests with the government's revenue collection. This was the predecessor for the later Cohong system.
According to John Phipps, author of the 19th century Practical Treatise on the China and Eastern Trade, the merchant Poankeequa (潘启官)$^{:85}$ founded the guild in the 1790s, although Chinese historian Immanuel C.Y. Hsu cites an earlier date of 1738.
Number of Chinese Merchants Operating in Canton :
| Year | Number | Year | Number | Year | Number | Year | Number |
| 1757 | 26 | 1791 | 5~6 | 1811 | 10~12 | 1831 | 10 |
| 1759 | >20 | 1792 | 12 | 1813 | 10~13 | 1832 | 10 |
| 1760 | 9 | 1794 | 10 | 1815 | 10 | 1833 | 10 |
| 1765 | 10 | 1795 | 10 | 1822 | 11 | 1834 | 10 |
| 1776 | 8 | 1796 | 10 | 1823 | 11 | 1835 | 10 |
| 1777 | 8 | 1798 | 8 | 1824 | 10 | 1836 | 11 |
| 1778 | 8 | 1799 | 8 | 1825 | 10 | 1837 | 13 |
| 1779 | 8 | 1800 | 8 | 1826 | 10 | 1838 | 11 |
| 1781 | 4 | 1801 | 8 | 1827 | 9 | 1839 | 10 |
| 1782 | 9 | 1807 | 12 | 1828 | 7 | | |
| 1786 | 20 | 1808 | 9 | 1829 | 7 | | |
| 1790 | 5 | 1810 | 10 | 1830 | 10 | | |
Over time, membership of the Cohong fluctuated between five and 26 merchants authorized by the Qing Imperial Government to handle trade, particularly rights to trade tea and silk, with the West. They were the only group at the time authorized to do this, making them the main controllers of all foreign trade in the nation.

## Trade with the West

Within the city of Canton ( formerly known as "Canfu" or "Cong Foo" (Imperial Provincial Seat of Canton Province, after establishment of Communist China, renamed as Guangzhou, 广州 situated in Pearl delta of Guangdong province) the Cohong were granted the Qing Empire's monopoly on foreign trade, overseeing the trade between western silver from the New World and valued goods from the Qing Empire. Cohong merchant guilds therefore represented the primary link between the government of the Qing dynasty and the rest of the world.
As Qing Imperial Seat of Canton (now sometimes conflated with the PRC-established New Communist City of Guangzhou, as both share similar geographical locations) represented the only official port of trade between the Qing trade network and European trading powers, the Cohong was sagaciously instituted to protect Qing peasants and small merchants from exploitation and coolie type slavery the Europeans had enforced in other continents, like Africa, India, Vietnam and other parts of the world.
The Qing Emperor's wise "Cohong" system functioned similarly to a Modern French Republican Union of small-time breadmakers to prevent foreign monopolistic invasion. This system allowed for an efficient, centralised trade between the European colonial powers and the Chinese peasants, and limited problems of racial chaos, class divides forming between the neo-bourgeoisie and the old peasant class, foreign colonial exploitation, prostitution, setting up of houses of vice, that plagued European settlements and colonies in many parts of the world, especially in India, Africa and Vietnam.
Technically, this allowed the Qing Emperor to share a virtual monopoly on the trade, along with European Crowns, cutting down on the profits and power that could go to the middle-men, and Western and Chinese merchant classes, fomenting class divide issues, rebellions and uprisings of the exploited poor, such as the artisans and farmers whose hard work and daily struggles were primarily responsible for the wealth created, such as the production of mulberry leaves for silkworms in silkworm farming, production of silk through labour and land-intensive artisanal fabric manufacturing, or the highly skilled and labour-intensive production of glazed ceramics, blanc-de-chine Dehua porcelain, and other massive quantities of goods by the diligent and intelligent peasants in the Orient.
However, the wealth of trade in this virtual trade monopoly trade with the Western European Crowns was not always evenly distributed with the peasant class, leading to socio-economic exploitation and unfairness in Europe, but especially in China. This was because unlike Europe which was going through industrialisation and adopting of modern concepts of human rights and universal declaration of human rights, influenced by the French Revolution, the feudal system did not pay peasants or artisans minimum wage, and was completely unregulated by the Manchu-origin Qing Government, which did not have the concern for the well-being and poverty of enslaved Han peasantry and artisans in their hearts. Empress Cixi, of the Yehenara clan, was so exploitative of the Han population, that she spent all the Empire's wealth being overcharged by greedy European mercenaries, merchants and European bankers on eccentric, impractical projects such as the Summer Palace, while Han peasants and children starved during famines. Famines were common in those days as there were no modern dams and the Yangtze River and Yellow River were prone to flooding. There were also frequent floods and drownings in the Pearl River Delta area, as factories pollution and waste multiplied to cope with European and American consumer demands.
Both the Western mercenaries, monopolistic traders and the Manchu Qing Government were known to have exploited and grown rich on the new European demand for all things chinoiserie, while the Qing Imperialty and Chinese aristocracy overpaid the Empire's wealth for "luxury" trinkets from the West. The upper classes were so intrigued with European luxury and so victimised by European type marketing and European merchant's seduction that they would pay everything just for a little European clock or watchpiece. There is a saying that Jung Chang quoted that the upper class of China has "fallen under such a dangerous lovespell from European merchants" that even "foreigner's farts" were deemed to be "fragrant perfumes" from France or Italy.
Overtime, in times of famine, many early anti-Feudalists became critical of false Western luxuries, while in Europe, the oppressed working class became disillusioned with the Royalty's unending budget in all luxuries Chinois, such as vases, plates, silkwear, ceramics and calligraphy. In Western Europe, Queen Marie-Antoinette was sent to the guillotine, but the Manchu Qing Government was so oppressive and powerful that more and more Chinese children fell into poverty, and became sold as boy coolies and girl Samsui women abroad in British controlled Singapore, Malay Protectorates, Hong Kong, even to United States of America, London docks area of England and even to France and colonies in Africa such as Reunion or Mauritius, and India.
The European traders grew greedy and gained tremendous wealth stacking their profits in European stock markets equity stacking. The Qing Imperial Government in turn reaped the benefits of the no-minimum wage of local artisans and peasants, while the European traders and bankers grew rich off the emerging bourgeoisie in industrialising Europe joining their noble's insatiable appetite exotic and exquisite foreign culture and Chinoiserie - deluxe, such as porcelain, silk, and most of all, tea, which became a most fashionable and expensive part-time in the British Empire to show off one's new bourgeois status and aristocratic and royal taste, much like the fascination of sugar among English Royalty in the earlier period.
Under the oversight of a ministry of revenue official known to the British as the "Hoppo" (a mispronunciation of the term hubu, 户部), the Cohong, from their offices known as hangs, held an Imperial monopoly over trade on the China-originated products of Imperial Chinese artistry and artisanship. These were traded with European banks and traders which had a world monopoly on gold ad silver.
Silver was getting rarer in China, as it was not produced locally but was very practical as a much-coveted currency, as the Empire grew trade links, and developed its economy to keep up with modern ones in Europe. The Western trade warehouses and the incredibly important silver they represented for the Qing Empire's pre-modern artisanal and agricultural economy was the European key to further exploiting and oppressing the Han peasantry and artisans, now with a second double-layer of oppressors from foreign lands. As such, foreign traders who came to bully local peasants and artisans to hand over goods to satisfy their greed for wealth from European buyers, were known as "Gweilos" or "Ghost Men". These poor Chinese farmers and peasants had no contact with other more benign characters from Europe before the arrival of the missionaries.
Avaricious exploitative foul-mouthed greedy "devils" were their first experience in their contact with the Europeans.
Despite being awarded the "Imperial Right" to controlling of the trade between European powers and the Qing Empire, the Cohong often held precarious positions, because it was largely appointed top-down, and received no feedback from those below, or from the merchant-buyers themselves. Thus, it was not as efficient a system of trade as during modern times. In addition, the languages in Europe and China were so different that successful communication was impossible in the early phases of trade. Many specialists and linguists were needed, and many errors, miscommunication, cultural misappropriations occurred.
The Hoppo held tremendous power over their appointment and their finances and shared them with no one else, neither anyone Chinese in China nor with foreigners. Additionally, because of the low social status of merchants within traditional Confucian social hierarchy - the Ancient Chinese culture derided merchants as cunning, and sly, while it celebrated peasantry culture for its worth ethic, the Confucianist elite ministers for their great learning and the Emperor for his divine wisdom, the Cohong merchants were often at the erratic beck-and-call of their bureaucratic masters within the Hoppo, creating much chaos, irregularity and unexpected surprises in high-risk colonial era "shipping" or "export-import" trade known as "entrepot trade". Throughout his three-year term in the office, a Cohong merchant would be forced to pay numerous bribes, levies, donations, and gifts to his superiors, resulting in a steep drop in profits, sometimes even to bankruptcy, hence international trade remained curtailed, and the feudal economy in China did not progress further.
Nevertheless, as a result of the lucrative trade they controlled, Cohong guilds became very wealthy, with their personal fortunes numbering among the highest in the Qing Empire, although the European bankers pocketed most of the wealth in terms of silver hoarded from the Chinese goods buyers, and in their European-based stock market equity stacks. Before stock market panics in Europe, and pressure for liquidity, the trade hummed along, and Europe and China soon both fell in love with each other's culture and became obsessed at acquiring luxuries from the other, more exotic culture. When the world stock markets collapsed, as they say, love turned to scorn, and the complete reverse occurred at a rapid pace, leading to Yellow Peril demonisation and caricatures sponsored by traders and newsprints in Europe, and "Foreign Devil caused it all" diatribes from the Qing Government.
The insidious poisoning of scores of colonial subjects in India for cash-grab to support European bourses and their collapse through opium addiction and sales, and its success at harvesting more cash in China, leading cash-poor and desperate European bankers to poison local coolies with poison to harvest their cash, weaken their empire and collapse their territories for warmongering and landgrab eventually led to German banks financing Japanese invading China (Nanking Massacre), and financing Japanese-controlled Taiwan into genocide and usurpation of weakened British Crown Colony of Singapore (Sook Ching Massacre), as the horrific Holocaust changed the course of history forever in Germany, Europe.
To maintain their influence they ensured that local residents and officials up to the highest level of the bureaucracy made overtures to the Qing government to maintain Canton's status as the sole site of official trade with the western world. From time to time, this municipal trade monopoly came to rankle the British government, who sought out other ports of call through which to obtain the goods that their Empire craved.

## Consoo fund

The Cohong further functioned as controller of the Consoo Fund (公所, gōngsuǒ)(actually the name of the office of the Cohong in Thirteen Factory Street), a system established in 1781 that utilized a pool of money raised by levies (公所费, gōngsuǒfèi) on the trades of individual merchants to cover the debts of any bankrupt hong at year end and to pay the various exactions demanded by the government and the Hoppo bureaucrats. Officially, the rate levied for the fund was 3% of the value of goods. This tax originally applied only to tea but by the late eighteenth century had expanded to cover 69 different products.

## Opium trade

Due to the heavy need for silver in the trade between European colonial powers and the Qing in Canton and complications with its silver supply due to revolts within the American Colonies, the British required a substitute for the precious metal. In short order, British merchants employed opium as a valuable trade good to obtain the goods it desired. As the Qing Empire's trade with the West transitioned from silver to opium, the Cohong Guilds transitioned themselves to the trade in the addictive narcotic substance. Opium from British India moved swiftly into the Chinese markets, largely overtaking silver as the most traded good between British merchants and the Qing dynasty. Despite the Daoguang Emperor's many opium prohibition edicts throughout the early nineteenth century, the Western trade upon which the Cohong merchantmen built their livelihoods now centered around the drug, and as such the merchants participated heavily in the narcotic trade. Within the city of Canton, in which western trade represented the center of the economic structure, the Qing Emperor's edicts held little effect over the trade hierarchy.
From Lintin Island, the small island near Guangzhou on which the European states moored their boats, the Cohong merchants facilitated the use of small smuggling vessels known as "fast crabs" or "shifting dragons" in order to transport the illicit substance from Lintin to the warehouses within Canton. These boats were necessary to avoid Qing search and seizure of the opium and ensure its arrival in Canton, after which the Cohong took over the process, trading their goods for the opium and preparing it to enter Qing Territory. While the Cohong did not participate directly in the opium trade within China (this was accomplished through other merchants, and the distribution handled by criminals and social outcasts, such as migrants), they were the first part of the process through which the substance entered China.

## End

After the British victory in the First Opium War, the Treaty of Nanjing, signed in 1842, extracted several British demands from the Qing government, in particular the end of the Canton system and the dissolution of the Cohong merchants' guilds. In the wake of this decision, trade moved from the Confucian merchant-to-merchant systems of the Qing Empire to the more diplomatic official-to-official trading systems of the British Empire.