Xiamen, and Guangzhou. Official British trade was conducted through the auspices of the British East India Company, which held a royal charter for trade with the Far East. The East India Company gradually came to dominate Sino-European trade from its position in India and due to the strength of the Royal Navy.
Trade benefited after the newly risen Qing dynasty relaxed maritime trade restrictions in the 1680s. Taiwan came under Qing control in 1683 and rhetoric regarding the tributary status of Europeans was muted. Guangzhou (known as Canton to Europeans) became the port of preference for incoming foreign trade. Ships did try to call at other ports, but these locations could not match the benefits of Canton's geographic position at the mouth of the Pearl River, nor did they have the city's long experience in balancing the demands of Beijing with those of Chinese and foreign merchants. From 1700 onward Canton was the center of maritime trade with China, and this market process was gradually formulated by Qing authorities into the "Canton System". From the system's inception in 1757, trading in China was extremely lucrative for European and Chinese merchants alike as goods such as tea, porcelain, and silk were valued highly enough in Europe to justify the expenses of traveling to Asia. The system was highly regulated by the Qing government. Foreign traders were only permitted to do business through a body of Chinese merchants known as the Cohong and were forbidden to learn Chinese. Foreigners could only live in one of the Thirteen Factories and were not allowed to enter or trade in any other part of China. Only low level government officials could be dealt with, and the imperial court could not be lobbied for any reason excepting official diplomatic missions. The Imperial laws that upheld the system were collectively known as the Prevention Barbarian Ordinances (防範外夷規條). The Cohong were particularly powerful in the Old China Trade, as they were tasked with appraising the value of foreign products, purchasing or rebuffing said imports, and charged with selling Chinese exports at an appropriate price. The Cohong was made up of between (depending on the politics of Canton) 6 to 20 merchant families. Most of the merchant houses these families ruled had been established by low-ranking mandarins, but several were Cantonese or Han in origin. Another key function of the Cohong was the traditional bond signed between a Cohong member and a foreign merchant. This bond stated that the receiving Cohong member was responsible for the foreign merchant's behavior and cargo while in China. In addition to dealing with the Cohong, European merchants were required to pay customs fees, measurement duties, provide gifts, and hire navigators.
Despite restrictions, silk and porcelain continued to drive trade through their popularity in Europe, and an insatiable demand for Chinese tea existed in Britain. From the mid-17th century onward around 28 million kilograms of silver were received by China, principally from European powers, in exchange for Chinese products.
A brisk trade between China and European powers continued for over a century. While this trading heavily favored the Chinese and resulted in European nations sustaining large trade deficits, the demand for Chinese goods continued to drive commerce. In addition, the colonization and conquest of the Americas resulted in European nations (namely Spain, Great Britain, and France) gaining access to a cheap supply of silver, resulting in European economies remaining relatively stable despite the trade deficit with China. This silver was also shipped across the Pacific Ocean to China directly, notably through the Spanish-controlled Philippines. In stark contrast to the European situation, Qing China sustained a trade surplus. Foreign silver flooded into China in exchange for Chinese goods, expanding the Chinese economy but also causing inflation and forming a Chinese reliance on European silver.
The continued economic expansion of European economies in 17th and 18th centuries gradually increased