>> The emperor and the mandarins did express some moral outrage over the debilitation caused by opium, but they were far more concerned about the drug's damage to their balance of trade. China subscribed to European-style mercantilism as faithfully as any seventeenth-century Western monarchy. Before 1800, the tea trade was, at least in the terms of the mercantilist ideology of the day, grossly favorable to the Chinese. The EIC's records pinpoint 1806 as the year when the silver flow reversed. After that date, the value of opium imports exceeded that of tea exports, and Chinese silver began flowing out of the Celestial Kingdom for the first time. After 1818, silver constituted fully one-fifth of the value of Chinese export goods.
In the 1820s, a powerful group of mandarins began to support legalizing opium as a way to reduce its price and staunch the outflow of silver. One of them, Hsu Nai-chi, wrote a memo to the emperor noting that some users were indeed enfeebled, but the fiscal damage to the nation was far worse. He recommended legalization, with the stipulation that opium should be purchased only by barter (presumably for tea), not with silver. The wide circulation of this memo among Canton's foreign traders gave them hope that legalization was imminent. Hsii's proposal was defeated, however, in a bitter battle at the imperial court.27
