“The Opium Business: A History of Crime and Capitalism in Maritime China” by Peter Thilly


After years of diplomatic pressure from the United States, China placed all fentanyl-related chemicals under an enhanced regulatory regime in 2019… only to see India emerge as a new source for the drug’s precursors the next year. Since then overdose deaths have continued to surge, prompting one US Senator to declare that “The flow of deadly synthetic opioids across our southern border is a public health crisis and a national security threat.” Peter Thilly’s new book, The Opium Business: A History of Crime and Capitalism in Maritime China, shows that a rising tide of addiction can indeed threaten a nation. It also shows why government attempts to disrupt the drug trade so often fail.

Thilly situates the book in the Chinese province of Fujian. Centuries of Qing rule never overcame the mutual distrust between Beijing and its southern littoral region. Here the Emperor counted for far less than one’s lineage, an institution based on common descent that functioned as a de facto local government. That independent streak, set along a coastline with countless bays and inlets, made it an ideal location for smuggling.


The Opium Business: A History of Crime and Capitalism in Maritime China, Peter Thilly (Stanford University Press, October 2022)
The Opium Business: A History of Crime and Capitalism in Maritime China, Peter Thilly (Stanford University Press, October 2022)

While the 1843 Treaty of Nanjing opened two treaty ports in Fujian, opium remained technically illegal for decades. So British firms operating out of Hong Kong delivered drugs by way of “receiving ships”. Dozens of ships loaded with Indian opium anchored just off the coast, allowing both Chinese and British officials to deny responsibility as a stream of smaller Chinese boats constantly ferried contraband onto the mainland.

Over the decades, power brokers at every level took the opportunity to enrich themselves, often blurring the distinction between taxation and bribery. Limited state capacity compelled reliance on tax farming, an arrangement whereby a firm pays the government a flat fee in exchange for the right to collect taxes and profit from the overage. So-called “prohibition bureaus” amounted to little more than government sponsored opium monopolies. But the choice to delegate responsibility for taxation and regulation to private firms sustained competing local power holders with divergent interests. Neighboring provinces were another threat, as each undercut the other’s tax rates in a futile race to the bottom. Nevertheless, opium still paid for more than half of the Qing’s import taxes from 1867 to 1900, with much of the windfall going to infrastructure and the military. But this “Self-Strengthening Movement” relied on the widespread use of a substance that destroyed countless Chinese lives.

The first Sino-Japanese War brought a new and far more invasive imperial power to Fujian. Japan declared that all inhabitants of Taiwan were now citizens of its empire and made the same offer to anyone with Taiwanese ancestry. Well-acquainted with the benefits of exterritoriality enjoyed by Europeans, many Fujianese took them up on the offer. While the overall aim had been to extend Japanese authority into trade networks across Southeast Asia, access to lucrative vice industries like drugs, gambling, and prostitution was not unwelcome.

For over a century, drugs were pervasive. In 1845, Fuzhou supported more than one hundred opium dens. In 1881, the dens in Xiamen employed 6 percent of the adult male population. In 1941, one in five Xiamen businesses sold opium, morphine or heroin. The addicts, dealers, and low-level enforcers lived and died in a sea of corruption and complicity. The British, Qing, Guomindang, and Japanese all averted their gaze while accruing the revenue.


The years from 1839 to 1945 were indeed a “Century of Humiliation” from the standpoint of Chinese sovereignty. While this book is far from an apologia for Western opium traders, Thilly shows that many Chinese were not so much victims as active agents who leveraged opium and the opportunities it created. Careful study of the period holds lessons for anyone concerned with drug epidemics, past or present.

Throughout the book, Thilly situates opium in the wider milieu. The Qing reliance on tax farming and opium monopolies was hardly unique; colonial regimes in Malaya and Indonesia also relied on the practice.  In that age of trade barriers, opium was just one of many goods smuggled into China on the receiving ships. In fact, Chinese officials often showed greater concern for the illegal export of rice than the import of narcotics. Once drugs arrived on the mainland, officials treated them like just another good under lijin, the system of transport taxes that applied to all Qing citizens.  For all its notoriety, opium behaved just like any other commodity subject to the forces of supply and demand. When the price of imported drugs rose, Chinese farmers abandoned traditional husbandry in favor of more lucrative, illicit crops. Dealers tried to protect their profit margins by branding their wares, only to see counterfeit goods surge into the marketplace. Farmers in rural Fujian even accepted opium as a form of currency.

Thilly put in yeoman’s work, combing archives in Asia, Europe, and North America. He photographed the ocean bays where British merchants weighed anchor, viewed the stamps affixed to confiscated drugs, and cites sources as diverse as 19th century American travelogs and 20th-century Hokkien fiction. And while addicts, smugglers, and corrupt officials rarely oblige historians with detailed memoirs, Thilly still managed to capture colorful personalities like St Julian Hugh Edwards, a black British subject raised in Singapore with a gift for languages and a knack for fraud. Edwards parlayed a stint in the US consular prison into a job as a constable before a tax evasion scheme left him stateless but still untouchable to the Qing authorities. Thilly discovered the bumbling German criminal Gustav Hoffman in letters intercepted by the British government. Hoffman’s amateurish scheme to import European-manufactured cocaine and morphine through Hong Kong relied on co-conspirators to refer to the drugs as “cheese” and “margarine” via telegraph. Ye Qinghe, the “Opium King” of Fujian, endured multiple stints in jail, but always seemed indispensable to those in power. When the League of Nations severed his connections to European drug companies, Ye opened a pharmacy as a front for a heroin factory. He prospered throughout the Japanese occupation, only to die at the hands of Chinese communists in 1944.


In the 50 years since Richard Nixon first declared a “War on Drugs”, Americans have tried and failed to eradicate coca in South America and poppy in Afghanistan. Meanwhile drug manufacturers innovated their way into new addictive substances that only exacerbated problems they meant to solve. Analogies to the present-day leap from every page, but Thilly leaves it to readers to supply them. That decision to refrain from offering trite lessons or solutions makes the book more credible as a work of scholarship, one that may continue to hold lessons after the current fentanyl epidemic subsides.

A former US Marine and Iraq war veteran, Dr James Herndon worked in Udaipur, India while completing his PhD in Economics. He currently works as a consultant in Birmingham, Alabama.