“Why, for example, should it be a US negotiating priority to open China’s financial system for Goldman Sachs?” – Jake Sullivan, US national security adviser, writing in Foreign Policy magazine “Every level [of the opium trade] is mired in smuggling … the Hong merchants don’t just look away, but aided and abetted the foreigners.” – Lin Zexu, Qing dynasty Mandarin whose anti-British campaign against the drug trade triggered the first opium war Separated by almost two centuries and from two different, often antagonistic civilisations, Jake Sullivan and Lin Zexu sounded a lot alike there. In advocating for the national security of their own countries, both men were complaining against the complicity of their own traders – in Wall Street’s case, financial traders – in colluding with hostile foreign elements. The opium war has been portrayed by generations of Chinese nationalists as launching the “century of humiliation” that only ended recently with national rejuvenation and renewal. But one of its great ironies was that at the time, many southern Chinese, especially those most involved in the British trade, cheered when the foreigners returned and redoubled their trade after the Qing defeat. There was no sense of humiliation among the general Chinese populace in the south, though the Chinese mandarins and their Qing (Manchu) masters were, no doubt, terribly upset and humiliated. US-China decoupling? Wall Street missed the memo Many reasons have been cited by historians for the repeated rout of Chinese soldiers by the British navy. Lack of modern military organisation, training, equipment, and esprit de corps as well as primitive technology, have all been blamed. (Interestingly, those were areas most focused on by the Japanese Meiji reformers in their farsightedness, only that it ultimately led to militarism and national disaster.) But the biggest reason was surely the lack of nationalism within the Qing army, for back then, there was not a Chinese nation, at least in its modern sense, to speak of. And, by virtue of their international trade, the Hong merchants felt closer to British free traders than to their Qing overlords. Likewise, unlike politicians in Washington, Wall Street bosses today much prefer trade over war with China. Unfortunately, nationalism and hegemony have a way of wreaking havoc over the far more rational calculus of trade and greed. The history of the opium war and its aftermath is a case in point. Wall Street has frequently been criticised, effectively, for greed over patriotism French revolutionary ideals and nationalism animated Napoleon’s Grande Armee that smashed traditional European monarchical armies into atoms and almost subjugated all of Europe. That in turn provoked nationalism within the defeated European states that would reform their armies to take revenge and bring about the French emperor’s downfall. In a similar if much more drawn-out way, the opium war provided the foundations, with all its mixture of facts, fantasies and myths, for modern Chinese nationalism. That part, at least, is well explained by historians. Long before the war, the Qing tolerated, on and off, the Chinese Hong merchants with their trade and often close business partnerships with British traders. But then Hong bosses were abruptly denounced – and sometimes punished – for their greed and disloyalty when the Qing court turned decisively against the opium trade. The Chinese merchants were no angels but they were no better or worse than most others. In a similar way, as Washington is escalating its cold war or cold peace against China, Wall Street has frequently been criticised, effectively, for greed over patriotism. Yet, in the preceding two decades, American financial institutions, especially the big investment banks, provided much of the financial expertise, infrastructure and technology that drew the Chinese and US economies ever closer, to the extent that they had been collectively identified as “Chimerica”. Weren’t opium wars good for China, too? One of the paradoxical phenomena in contemporary international relations, as I commented in this space yesterday, is that Wall Street and China are being drawn closer than ever while Washington is turning increasingly hostile, if not overtly militaristic. Indeed, the overall trade gap between the two countries has actually widened, thereby boosting China’s already great trade surplus. Just as the Qings implicated the British drug trade for undermining the very foundation of the empire and society, so Washington now claims all sorts of outlandish harms that the China trade has allegedly inflicted on America and its allies’ economies. In both cases, deep-seated internal social and economic problems caused by their own systems and long-term mismanagement were blamed on foreigners. One reason the first opium war broke out was surely that the Hong merchants failed to act as a moderating or restraining influence on the royal Qing court. Their wealth was great; the richest of them all, Wu Bingjian, better known in Victorian Britain as “Howqua”, was said to be much wealthier than the Rothschilds in Europe. But their social status was low. Beyond outright bribes, their political influence was virtually null. Not so the Wall Street banks today, which do have considerable political clout in Washington. The fact that powerful American financiers have been induced to be a crucial link to the Chinese economy must work to restrain, at least to some extent, Washington’s increasingly militaristic aggression, and to limit the economic fallouts from so-called decoupling. Few people outside of Wall Street like Wall Street, but its financial globalisation and capitalism may yet make their titans inadvertent peacemakers of sorts.