A little History on Free Trade and balance of Trade: Hong Kong became a British colony after the Treaty of Nanking in 1842, as a result of the Opium War. The growing British taste for tea had created a huge trade deficit with China. In a desperate attempt to plug the gap, Britain started exporting opium produced in India to China. The mere detail that selling opium was illegal in China could not possibly be allowed to obstruct the noble cause of balancing the books. When a Chinese official seized an illicit cargo of opium in 1841, the British government used it as an excuse to fix the problem once and for all by declaring war. China was heavily defeated in the war and forced to sign the Treaty of Nanking, which made China “lease” Hong Kong to Britain and give up its right to set its own tariffs.
Posted on: Fri, 25 Jul 2014 23:58:32 +0000
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