The China Trade

"The Chinese want silver for their tea. And if we paid in silver, it would bankrupt England in a year! So, we sell them opium for their silver, and then give it back to them for tea. That's how the China trade works!"

--Dirk Struan, Tai-Pan

I thought of the quotation above after reading a recent article in The Weekly Standard on the state of world trade. This line seemed of a piece with the fictional Struan's explanation of Britain's 19th century dealings with the Middle Kingdom.

They send us goods, we send back bits of paper with pictures of presidents on it, they send back some of those dollars to pay for Treasury IOUs, thereby keeping interest rates here lower than they would otherwise be.

Maybe this is the Chinese revenge for the Opium War of 1839-42? The Triangle Trade ain't dead yet...