Editing First Opium War (section)

=== European trade deficits ===
A brisk trade between China and European powers continued for over a century. While this trading heavily favoured the Chinese and resulted in European nations sustaining large [[trade deficit]]s, the demand for Chinese goods continued to drive commerce. In addition, the colonisation 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.<ref name="Fay-2000e" /><ref name="Fay-2000h" />

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.<ref name="Fay-2000e" /> 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).<ref name="Peyrefitte-1792" />{{page range too broad|date=September 2021}}<ref name="Peyrefitte 1993, p487-503">Peyrefitte 1993, pp. 487–503.</ref>{{page range too broad|date=September 2021}} 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.<ref name="China: The First Opium War" /><ref name="Fay-2000d" />{{page range too broad|date=September 2021}} 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.<ref name="Fay-2000e" /> 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.<ref name="Peyrefitte 1993, p487-503" />{{page range too broad|date=September 2021}}<ref name="Hanes 2002">{{Cite book |last=Hanes III |first=W. Travis |url=https://archive.org/details/opiumwarsaddicti00hane |title=The Opium Wars |last2=Sanello |first2=Frank |author-link2=Frank Sanello |publisher=Sourcebooks |year=2002 |location=Naperville, IL |page=[https://archive.org/details/opiumwarsaddicti00hane/page/20 20] |url-access=registration}}</ref> The Chinese economy was unaffected by fluctuations in silver prices, as China was able to [[Iwami Ginzan Silver Mine|import Japanese silver]] to stabilise its money supply.<ref name="Goldstone-2016" />{{page needed|date=September 2021}} European goods remained in low demand in China, ensuring the longstanding trade surplus with the European nations continued.<ref name="China: The First Opium War">{{Cite web |title=China: The First Opium War |url=http://web.jjay.cuny.edu/~jobrien/reference/ob36.html |url-status=dead |archive-url=https://web.archive.org/web/20101201214224/http://web.jjay.cuny.edu/~jobrien/reference/ob36.html |archive-date=1 December 2010 |access-date=2 December 2010 |publisher=John Jay College of Criminal Justice, City University of New York}} Quoting ''British Parliamentary Papers'', 1840, XXXVI (223), p. 374.</ref> 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.<ref name="Fay-2000e" /><ref>Meyers, Wang (2003) p. 587.</ref>{{failed verification|date=September 2021}}

[[File:Two poor Chinese opium smokers. Gouache painting on rice-pap Wellcome V0019165.jpg|thumb|Chinese opium smokers]]