Before Hong Kong: Essential context

When the Portuguese established Macao as a permanent trading settlement with the permission of the local Chinese mandarinate in about 1557, the face of South China trade changed. The tiny port rapidly developed as a centre of entrepôt trade between China and Japan, using Portuguese vessels and mariners as carriers. Repeated piratical raids by the Japanese had led to their prohibition from Chinese ports.

This, together with Ming Dynasty restrictions on the movement of Chinese abroad, meant that the Portuguese were in the perfect position to act as middle men, bringing mainly raw Chinese silk to Japan, and returning with silver and copper (though there was some trade in high-quality porcelain as well).

A virtual monopoly of the carrying trade resulted for the Portuguese, ushering in a period of wealth and prosperity that Macao has never seen since – the period from 1560 to 1640 is often referred to as the Golden Age of Macao.

In addition to trade, the Portuguese played a major role in exporting Catholic missionaries to Japan, an unwelcome activity that eventually led to the complete closure of Japan to Portuguese trade in 1639. (The Calvinist Dutch, however, were still allowed to trade at Deshima, near Nagasaki, as their cargoes were conspicuously free of priests.)

Around this time, the first British navigator to reach the China Coast, Captain Weddell, had landed at Macao in 1637, and, in spite of orders by the Chinese not to approach, tried to enter the city of Canton (now Guangzhou). He was driven away and no further British vessels visited these waters for several decades.

The closure of Japan to Portuguese trade was an important factor in both Macao’s period of slow decline (which continued until the late 18th century) and the subsequent rise of British and Dutch colonial power in Asia. Throughout this period, Hong Kong remained unnoticed on the other side of the Pearl River Delta, just one more island among hundreds up and down the Guangdong coast, inhabited by a few fishermen, subsistence farmers and pirates.

 

Canton trade

For centuries after the establishment of Macao in 1556-57, European traders were not permitted any permanent trading station in China other than Macao itself. Seasonal trade at the port of Canton was permitted, but merchants had to leave the city at the end of the trading season and return to Macao.

While in Canton, they were prohibited from bringing their wives and families with them, forbidden to learn Chinese and had their movement around town restricted. Few were allowed to venture beyond their trading compounds or ‘factories’, as they were known. Gradually, these restrictions became increasingly irksome, accompanied as they were by bribery, corruption and constantly changing standards and expectations.

The mid 18th century witnessed a growing passion in Europe for tea, silk and other luxury goods, thanks to a long period of steadily rising prosperity. Tea, especially, was in enormous demand and, at this time, China enjoyed a world monopoly on supply.

The Chinese insisted that everything be paid for in silver specie (China remained on the silver standard until the early 1930s), which, in due course, led to serious balance of trade deficits in favour of China, as it had little use for European trade goods at the time, other than a few clocks, trinkets and curios. The key to unlocking the Chinese treasure chest was opium.

 

British East India Company

The British East India Company grew opium under government monopoly in India and sold it at public auction in Calcutta every year. As the Company was officially opposed to the opium trade, and opium was not to be carried in Company ships or traded by Company officials, a system of private traders (known as the ‘Country Trade’) developed.

These merchants bought opium at the Calcutta auctions and smuggled it to China aboard specially built vessels. Numerous early trading houses, which later became big names on the China Coast, such as Jardine Matheson, Dent’s and Russell’s, were heavily involved in the opium trade.

While it is the British who are usually vilified for introducing opium to China, it is worth remembering that numerous Scandinavian and American firms were heavily involved as well. The major opium-smuggling depot was located on Lintin, where Alvares had made his China landfall in 1513.

opium ships at Lintin China

Although a series of opium bans were introduced by the Chinese Government, they were largely ineffectual due mainly to localised corruption and the active involvement of Chinese officials in the illicit opium trade. What’s more, a couple of attempts by British East India Company officials to formalise diplomatic relations between Britain and China were rebuffed by the Chinese.

However, the ever-increasing volume of foreign merchant shipping in the region did alarm the Chinese authorities and they constructed a range of coastal defences, including forts at Fan Lau and Tung Chung on Lantau island, at the Bocca Tigris (Bogue) and elsewhere in the Pearl River Delta, some of which still stand today.

Treaty of Nanking_1841

The First Opium War

From 1830, there was a gradual increase in tension between the British merchants and the Chinese authorities in Canton over the opium question. As a result, in 1834, Lord William John Napier was appointed as Commissioner of Trade, with the intention of regularising trade and, eventually, establishing diplomatic relations between the two empires. (Napier’s name, unpromisingly, transliterated into Chinese as ‘laboriously vile’.) When Napier died while on official duty, he was succeeded by Captain Charles Elliot.

Elliot was in the unenviable position of having to support a trade of which (subsequent correspondence has shown) he did not personally approve, and negotiate with the Chinese, who – at this time – had no experience of dealing with other nations except as tributaries. In 1839, Commissioner Lin Tse-hsu was appointed to completely suppress the opium trade. Lin did his work well, and his campaign resulted in the surrender and destruction of over 20,000 chests of (mostly British-owned) opium at Canton.

This action provided the causus belli for military action, for which many of the merchants had long been agitating in the British Parliament, and a British fleet dispatched from India attacked the Bogue forts on the Pearl River approaches to Canton. Various attempts at conciliation between the two parties failed, but eventually the Convention of Chuen Pi (signed in 1841) ended hostilities.

The subsequent Treaty of Nanking, signed in 1842, arranged for the opening of five Chinese ports to foreign trade (the first Treaty Ports) and for the cession of Hong Kong Island ‘in perpetuity’ to the British Crown, as a place of permanent, stable, safe British trade.

 

Why Hong Kong Island?

Hong Kong Island was chosen, over other larger and more prosperous locations (such as the island of Chusan at the entrance to the Yangtze in eastern China), because it was well known to mariners and possessed an excellent, well-sheltered natural harbour. Ships travelling to Canton or further up and down the coast would usually call at Waterfall Bay (near present-day Wah Fu Estate on the western side of Hong Kong Island) for fresh drinking water; they also took shelter from stormy weather and typhoons at Shek Pai Wan (modern Aberdeen). The name Hong Kong is a corruption of Heung Gong, meaning ‘fragrant harbour’, which is a reference to the sandalwood incense mills then found at Aberdeen that could be smelled from out at sea.

Hong Kong Island was formally occupied on 26 January 1841, and developed rapidly as merchants and traders who had previously been based in Canton and Macao moved to the island.

 

Early Hong Kong

Central district was the first area of planned urban development in Hong Kong. At land sales held in June 1841 (five months after the British flag was raised at Possession Point), 51 lots of land were sold to 23 merchant houses for the purpose of building offices and godowns (as warehouses are known in Asia). These firms included Jardine Matheson, which is still prominent today, and its then-rival Dent’s, which was wiped out in the slump of 1867.

Office buildings in a style very reminiscent of Macao were constructed between the waterfront and Queen’s Road as far as Central Market, the site of which was designated a public market in 1842. In November 1841, the ridge of land between Albany Nullah (now Garden Road) and Glenealy Nullah (now Glenealy) was set aside for Crown use, and subsequently became known as Government Hill. The Colonial Secretariat, Government House, Albany Government Quarters and St John’s Cathedral were all built on this slope.

The area extending between Government Hill and Wan Chai was designated for military use. Victoria and Wellington Barracks were built, and the area remained on the defence estate until the late 1970s. This officially created division between the districts of Central and Wan Chai meant, in effect, that additional residential and commercial areas could only be developed to the east of the military cantonment.

In 1843, after Hong Kong officially became a Crown Colony and, thus, a permanent settlement, the rapidly developing city was named Victoria; it extended over what is now Sheung Wan, Central and Wan Chai.

Central, however, became the principal business district and centre of administration – it remains so today. In addition to the military cantonments established to the east of Government Hill, a military camp was established at Stanley soon after the British arrival.

From the 1840s, the area around Lyndhurst Terrace, Hollywood Road and Aberdeen Street was a European residential area. From the 1870s onwards, however, increasing numbers of Chinese merchants bought properties in this area, converting the buildings into tenements.

From this time onwards, therefore, the Europeans moved up the hill to the area of Caine and Robinson roads, marking the beginnings of residential development in the Mid-Levels. The Crown Colony’s first 20 years were very buccaneering in spirit, characterised by corruption, lawlessness, brutality and a generalised sense of ‘make-it-quick, make-it-now, then-get-out-fast’, which – some would say – has persisted ever since.

A key problem at the beginning was the lack of an efficient civil service, as almost no Government officers for the first 20 or so years of the colony’s existence were able to either speak or read Chinese. Policing and the legal system were hopelessly inadequate, with many government posts filled by almost anyone who happened to be in Hong Kong when a job was going.

There was little interaction between the Chinese and European communities – outside the bedrooms of a few – leading to a great deal of fear, bigotry and misunderstanding on both sides. An attempted poisoning of the main European bread supply in 1857 caused widespread panic and further hastened the process of racial alienation and polarisation.

The first specially recruited Hong Kong Government administrative cadets (who all learned about Chinese culture and how to speak Cantonese) were appointed in 1862, and this led gradually to an improvement in government standards. In general terms, Hong Kong witnessed a gradual and steady improvement throughout the 1860s and 1870s.