Low Chinese demand for European goods, and high European demand for Chinese goods, including tea, silk, and porcelain, forced European merchants to purchase these goods with silver, the only commodity the Chinese would accept. From the mid-17th century around 28 million kilograms of silver was received by China, principally from European powers, in exchange for Chinese goods.This was not a viable long term trading dynamic. Britain's problem was further complicated by the fact that it had been using the gold standard from the mid 18th Century and therefore had to purchase silver from other European countries, incurring an additional transaction cost.

In the 18th century, despite ardent protest from the Qing government, British traders began importing opium from India. Because of its strong mass appeal and addictive nature, opium was an effective solution to the trade problem. An instant consumer market for the drug was secured by the addiction of thousands of Chinese, and the flow of silver was reversed.