structural:summarization
Foreign merchants in Guangzhou

As the opium-fuelled China Trade increased in scope and value, the foreign presence in Guangzhou and Macau grew in size and influence. The Thirteen Factories district of Guangzhou continued to expand, and was labelled the "foreign quarter". A small population of merchants began to stay in Guangzhou year round (most merchants lived in Macau for the summer months, then moved to Guangzhou in the winter), and a local chamber of commerce was formed. In the first two decades of the 19th century, the increasingly sophisticated (and profitable) trade between Europe and China allowed for a clique of European merchants to rise to positions of great importance in China. The most notable of these figures were William Jardine and James Matheson (who went on to found Jardine Matheson), British merchants who operated a consignment and shipping business in Guangzhou and Macau, with associates such as Jamsetjee Jejeebhoy, who became their principal supplier in India. While all three dealt in legal goods, they also profited greatly from selling opium. Jardine in particular was effective in navigating the political environment of Guangzhou to allow for more narcotics to be smuggled into China. He was also contemptuous of the Chinese legal system, and often used his economic influence to subvert Chinese authorities. This included his (with Matheson's support) petitioning for the British government to attempt to gain trading rights and political recognition from Imperial China, by force if necessary. In addition to trade, some western missionaries arrived and began to proselytise Christianity to the Chinese. While some officials tolerated this (Macau-based Jesuits had been active in China since the early 17th century), some officials clashed with Chinese Christians, raising tensions between western merchants and Qing officials.

While the foreign community in Guangzhou grew in influence, the local government began to suffer from civil discord inside China. The White Lotus Rebellion (1796–1804) drained the Qing dynasty's treasury of silver, forcing the government to levy increasingly heavy taxes on merchants. These taxes did not abate after the rebellion was crushed, as the Chinese government began a massive project to repair state-owned properties on the Yellow River, referred to as the "Yellow River Conservancy". The merchants of Guangzhou were further expected to make contributions to fight banditry. These taxes weighed heavily on the profits made by the Cohong merchants; by the 1830s, the once-prosperous Cohong had seen their wealth greatly reduced. In addition, the declining value of China's domestic currency resulted in many people in Guangzhou using foreign silver coins (Spanish coins were the most valued, followed by American coins) as they contained higher amounts of silver. Using western coins allowed Cantonese coiners to make many Chinese coins from melted-down western coins, greatly increasing the city's wealth, and tax revenue while tying much of the economy of the city to the foreign merchants.

A significant development came in 1834 when reformers (some of whom were financially backed by Jardine) in Britain, advocating for free trade, succeeded in ending the monopoly of the British East India Company under the Charter Act of the previous year. This shift in trade policy ended the need for merchants to comply with the royal charter for trade in the far east; with this centuries-old restriction lifted, the British China trade was opened to private entrepreneurs, many of whom joined the highly profitable opium trade.

On the eve of the Qing government's crackdown on opium, a Chinese official described the changes in society caused by the drug;

At the beginning, opium smoking was confined to the fops of wealthy families who took up the habit as a form of conspicuous consumption, even they knew that they should not indulge in it to the greatest extreme. Later, people of all social strata—from government officials and members of the gentry to craftsmen, merchants, entertainers, and servants, and even women, Buddhist monks and nuns, and Taoist priests—took up the habit and openly bought and equipped themselves with smoking instruments. Even in the center of our dynasty—the nation's capital and its surrounding areas—some of the inhabitants have also been contaminated by this dreadful poison.