I. DEFINITIONS

 A. Mercantilism - The volume of trade world-wide is limited; countries expand their trade at the expense of others.

1. High governmental involvement through tariffs, quotas, domestic industrial regulation, and controlled trading companies.
2. Economic success is determined by influx of precious metals (gold, silver) into your country.

 B. Free Trade - commerce that is relatively unrestricted and unaided by government regulations such as tariffs, quotas and subsidies.

1. Nations should export those goods they are efficient in producing.
2. Nations should import those goods they are inefficient in producing.

II. BACKGROUND (1793 - 1839)

 A. Lord Macartney’s trade mission to China - Tea in demand.

1. Seeks more open ports, admission into Peking (Beijing), lower tariffs, and missionaries.
2. Emperor Ch’ien Lung refuses all requests.

  a. all pay tribute to China and all treated equally.
  b. China does not need foreign goods.

 B. British discover one item in demand in China - opium.

1. Trade balance shifts as British increase opium imports.
2. Chinese debate the legalization of opium.

 C. Lin Tse-hsu appointed Commissioner of Canton in 1839.

1. Lin seizes and destroys British opium stores in Canton.
2. Letter to Queen Victoria (1940) ignored

III. First Opium War (1839-42)

 A. British win easily with superior military technology.

1. Seize Nanking (Nanjing) and Grand Canal.
2. Disrupt internal flow of Chinese commerce.

 B. Treaties of Nanking (1842) and the Bogue (1843)

1. Opened five ports: Canton (Guangzhou), Amoy (Xiamen), Foochow (Fuzhou), Ningpo (Ningbo), and Shanghai to British trade.
2. Ceded Hong Kong island to the British.
3. Granted Extraterritoriality to British citizens.
4. Chinese paid 12 million for the war and 6 million for the destroyed opium.
5. By 1844 most western powers had similar rights.

IV. Second Opium War (Anglo-French War, 1856-60)

 A. China once again easily defeated by western powers.

 B. Treaty of Tiensin (Tianjin, 1858)

1. Chinese refused to ratify.
2. Fighting resumes and Peking is captured.
3. Chinese finally ratify the treaty in 1860.
4. Eleven more ports opened to foreign trade.
5. Foreign envoys allowed to live in Peking.
6. Missionaries and other foreigners allowed to travel in    the interior.
7. Kowloon Peninsula (opposite of Hong Kong) ceded to     British.
8. The importation of opium is legalized in China.

FREE TRADE EXERCISE

  I. OBJECTIVE

Through the use of a group game, understand the basic mechanics of free trade and mercantilism.

50 pennies, four different kinds of candy, 25 pieces of each.

- Students to understand the principle of free trade.
- Students to understand the principle of mercantilism.
- Present the material in a fun way to break up the normal classroom routine.

Is everyone participating?  Have I split the class appropriately so all feel comfortable?

Motivation/Introduction      (5 minutes)

1. Inform the class that they get to play a game today and if all goes well they will not only understand free trade and mercantilism but will get a treat at the end.
2. Define free trade and mercantilism.

Teaching Procedures and Student Activity   (20 minutes)

1. Split the class in to three groups representing Great Britain, China, and India in the mid 19th century.
2. Assign each candy to four trade goods: cotton, tea, silk, and opium.
3. Explain the exchange rate: 1 penny = 1 cotton = 1 tea = 1 silk = .5 opium.
4. Assign 25 pennies and 25 units of cotton to Great Britain, 25 units of opium to India, and 25 pennies, 25 units of tea, and 25 units of silk to China.
5. Explain the relationships between the three countries during the middle of the 19th century.
6. Begin free trading by having each group sending delegates for trade missions with the needs for each country(Great Britain desires 5 units of tea and silk, China desires only 5 units of cotton).  Explain the difference must be made up with the pennies.
7. Let India know that they will get involved after five rounds but do not eat the candy.
8. Trade between Great Britain and China lasts for five rounds at which point Great Britain runs out of pennies.
9. Introduce the concept of mercantilism by which the British operate; search for an alternative - opium.  China now wishes to have 5 units of opium.
10. Trade, with India and Great Britain together, now goes on for five more rounds until China runs out of pennies.

Closure/Evaluation       (15 minutes)

1. Return to the key concepts, free trade and mercantilism.
2. Collect candy and pennies.
3. Have students write a one page reflection on the two key concepts and how they relate to the game played.
4. When finished, divide up the candy among the class.

Check that what is written in the assignment matches the objectives, understanding free trade and mercantilism.

1. Have all materials ready.
2. Divide class appropriately.
3. Provide guidance during game.

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