ffing 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 the European demand for precious metals, which were used to mint new coins; this increasing need for hard currency to remain in circulation in Europe reduced the supply of bullion available for trade in China, driving up costs and leading to competition between merchants in Europe and European merchants who traded with the Chinese. This market force resulted in a chronic trade deficit for European governments, who were forced to risk silver shortages in their domestic economies to supply the needs of their merchants in Asia (who as private enterprises still turned a profit by selling valuable Chinese goods to consumers in Europe). This gradual effect was greatly exacerbated by a series of large-scale colonial wars between Great Britain and Spain in the mid 18th century; these conflicts disrupted the international silver market and eventually resulted in the independence of powerful new nations, namely the United States and Mexico. Without cheap silver from the colonies to sustain their trade, European merchants who traded with China began to take silver directly out of circulation in the already-weakened economies of Europe to pay for goods in China. This angered governments, who saw their economies shrink as a result, and fostered a great deal of animosity towards the Chinese for their restriction of European trade. The Chinese economy was unaffected by fluctuations in silver prices, as China was able to import Japanese silver to stabilize its money supply. European goods remained in low demand in China, ensuring the longstanding trade surplus with the European nations continued. Despite these tensions, trade between China and Europe grew by an estimated 4% annually in the years leading up to the start of the opium trade.
Opium as a medicinal ingredient was documented in Chinese texts as early as the Tang dynasty, but the recreational usage of narcotic opium was limited. As with India, opium (then limited by distance to a dried powder, often drunk with tea or water) was introduced to China and Southeast Asia by