Alarmed and outraged, the Chinese court appointed a special commissioner impervious to bribery, Lin Zexu, charged with stopping the smuggling. Lin demanded the British surrender all opium, personally petitioning Queen Victoria. Ignored, in 1839, perhaps inspired by the Boston Tea Party, the commissioner seized and dumped more than 20,000 chests of opium into “specially-excavated trenches filled with lime and then seawater, destroying the drug completely.”

The British cried theft. Governmental estimate of the takings’ retail value: £2 million-in modern terms, between $330 million and $2.8 billion. “Free trade is Jesus Christ,” a British official said, “and Jesus Christ is free trade.” In 1839, two world empires went to war, ending in 1842 with inglorious defeat for the Chinese.

The Treaty of Nanjing forced the Chinese to open key port cities to foreign merchants and their import of choice-of course, opium, now legal. As well, ceded to Great Britain for perpetuity, “a spillage of inconsequential islands at the mouth of the Pearl River,” was Hong Kong. Historians call what followed China’s “century of humiliation.” The Emperorship fractured and local warlords reigned. Ensuing civil war and Japanese invasion made possible a complete Communist Party power grab by 1949. Until Maoists banned opium and executed any dealers, as many as one in ten of their countrymen were addicts.

What Britain had done in China, meanwhile, became a model for other would-be trading powers. The Dutch in the East Indies, the French in Indochina, and the Japanese in Taiwan all made state-run opium rings key to their excise revenue and political power. Today, of course, it is the Americans who wince most about trade with China. Twenty years ago Chinese imports to the United States exceeded American exports to China by only about $1.7 billion. Ten years ago that number was nearly $40 billion, more than doubling by 2001 to $83 billion. This year expect a total deficit of approximately $215 billion.

When Hu Jintao visited the United States last April, The Observer said, “Last week George Bush, leader of the most powerful country on earth, met Hu Jintao, his banker.”

How to solve a huge Chinese trade deficit? The British Empire’s early answer: opium. The story is one of the most sordid in the history of world trade. Its origins, however, are all too understandable. Its repercussions continue to this day.

“Though China had nothing she wanted to buy abroad, she offered for export a commodity which in those days could be procured nowhere else-teas,” explains Jack Beeching, author of The Chinese Opium Wars. To purchase what would eventually be an annual 7,500 tons of tea, the British spent almost £30 million in silver and gold in the half century between 1710 and 1760; reciprocal purchases by the Chinese, however, totaled fewer than £10 million. “The British,” Beeching says, “needed to find some article the Chinese would crave to buy, and so restore the balance of trade.”

In 1792, a richly-appointed British ambassadorial team embarked eastward on a three-year mission to establish trade relations between the most powerful nations in the west and east. To Emperor Ch’ien Lung, however, master of a population twenty times that of Great Britain’s and an area twice that of today’s continental United States, George III was neither peer nor power. “As your Ambassador can see for himself, we possess all things,” he dismissively told the British. “I have no use for your country’s manufactures.”

Yet as early as 1773, the East India Trading Company, Britain’s merchant ‘spice’ collective, had exported opium illegally from India to China. That successive emperors had banned the drug’s sale and use as social ills did not deter traders. All else the Chinese would buy were imported ginseng, seal skins, and pretty chiming clocks-and none, writes Beeching, “in such quantity as to account for all that tonnage of tea.” In 1836, the dollar value of imported opium at last exceeded that of exported tea. “Opium alone,” records one history, “had resuscitated the British economy.”