Background
From the inception of the Canton System by the Qing Dynasty in 1756, trade in goods from China was extremely lucrative for European and Chinese merchants alike. However, foreign traders were only permitted to do business through a body of Chinese merchants known as the Thirteen Hongs and were restricted to Canton (Guangzhou). Foreigners could only live in one of the Thirteen Factories, near Shameen Island, Canton and were not allowed to enter, much less live or trade in, any other part of China.
Following the abortive 1793 British Macartney Embassy aimed at opening up trade with China, the Qing Qianlong Emperor declared: "China is the centre of the world and has everything we could ever need and that all Chinese products were to be bought with Silver." Hence it became impossible for the British to import the same low-value manufactured consumer products to China as they traded in India, and which the average Chinese person could afford to buy.
Read more about this topic: First Opium War
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