Jardine, Matheson & Co.

Opium is now the most significant commodity in world trade.

Britain had imported 18,956 chests of Indian opium to China in 1830.

Turkish exports to China in 1830 had totaled one hundred tons, as compared to seven tons in 1805.

With the expiration in 1832 of the official monopoly of the opium traffic by the British East India Company, its mandate to rule and dictate the trade policies of British India no longer in effect, Jardine-Matheson and Company of London inherits India's opium from the Company.

Only nineteen hundred of the thirty-three hundred men who had originally occupied Dinghai are left by the beginning of 1841, with many of those remaining incapable of fighting.

An estimated five hundred British soldiers have died from disease, with the Cameron and Bengali volunteers suffering the most deaths, while the Royal Marines are relatively unscathed.

Having captured Dinghai, the British expedition divided its forces, sending one fleet south to the Pearl River while sending a second fleet north to the Yellow Sea.

The northern fleet sails to the Hai River, where Elliot personally presented Palmerston's letter to the Emperor to Qing authorities from the capital.

Qishan, a high-ranking Manchu official, is selected by the Imperial Court to replace Lin as the Viceroy of Liangguang after the latter is discharged for his failure to resolve the opium situation.

Negotiations began between the two sides, with Qishan serving as the primary negotiator for the Qing and Elliot serving as the representative for the British Crown.

After a week of negotiations, Qishan and Elliot agree to relocate to the Pearl River for further negotiations.

In return for the courtesy of the British to withdraw from the Yellow Sea, Qishan promises to requisition imperial funds as restitution for British merchants who had suffered damages.

The northern elements of the expedition had sailed south to Humen, known to the British as The Bogue, five months after the victory at Chusan.

Bremer judges that gaining control of the Pearl River and Canton would put the British in a strong negotiating position with the Qing authorities, as well as allow for the renewal of trade when the war ended.

While the British campaign in the north, Qing Admiral Guan Taipei greatly reinforces the Qing positions in Humen (Bocca Tigris), suspecting (sources state that Guan had been preparing for an eventual attack on the position since Napier's attack in 1835) that the British will attempt to force their way up the Pearl River to Canton.

The Humen forts block transit of the river, and are garrisoned with three thousand men and three hundred and six cannon.

By the time the British fleet is ready for action, ten thousand Qing soldiers are in position to defend Canton and the surrounding area.

The British fleet arrives to Humen in early January, and begins to bombard the Qing defenses at Chuenpi after a group of Chinese fire-rafts are sent drifting towards the Royal navy ships.

On January 7, 1841, the British win a decisive victory in the Second Battle of Chuenpi, destroying eleven junks of the Chinese southern fleet and capturing the Humen forts.

The victory allows the British to set up a blockade of The Bogue, a blow that forces the Qing navy to retreat upriver.

Qishan of the Qing Dynasty. knowing the strategic value of the Pearl River Delta to China and aware that British naval superiority made a reconquest of the region unlikely, attempts to prevent the war from widening further by negotiating a peace treaty with Britain.

Charles Elliot and Qishan agree to the Convention of Chuenpi on January 20, 1841. 

To force Chinese concessions, the British had captured the forts at the entrance of the Humen strait (Bogue) on January 7, 1841, after which Qishan had agreed to consider Elliot's demands.

Negotiations had ensued at the Bogue near Chuenpi.

On January 11, Qishan had offered to "grant a place outside the estuary to lodge temporarily".

He had later written to Elliot on January 15, offering either Hong Kong Island or Kowloon but not both.

Elliot had replied the next day, accepting Hong Kong.

On January 15, trader James Matheson had written to his business partner William Jardine that Elliot had arrived in Macao the night before: "I learn from him very confidentially that Ki Shen [Qishan] has agreed to the British having a possession of their own outside, but objects to ceding Chuenpee; in lieu of which Captain Elliot has proposed Hong Kong".

One factor that may have led to settling on Hong Kong was the perceived ambiguity of the Chinese language.

Matheson believed that when Qishan wrote "as we have granted you territory you do not now require another port", Elliot as a result gave up demands of British access to a port in northern China in the hope that he could hold Qishan to an interpretation of the Chinese characters in which the British had been ceded Hong Kong rather than just being given a trading factory there.

The convention will establish equal diplomatic rights between Britain and China, exchange Hong Kong Island for Chusan, facilitate the release of shipwrecked and kidnapped British citizens held by the Chinese, and reopen trade in Canton by February 1, 1841.

China will also pay six million silver dollars as recompense for the opium destroyed at Humen in 1838.

However, the legal status of the opium trade is not resolved and instead left open to be discussed at a future date.

The terms are published on January 20, 1841, but both governments will reject them and dismiss Elliot and Qishan, respectively, from their positions.

Foreign Secretary Lord Palmerston will state that Elliot had acquired too little while the Daoguang Emperor believes Qishan has conceded too much.

Palmerston will appoint Major-General Henry Pottinger to replace Elliot, while the emperor will appoint Yang Fang to replace Qishan, along with Yishan as General-in-Chief of Repressing Rebellion and Longwen as an assistant regional commander.

Although the convention will go unratified, many of the terms will later be included in the Treaty of Nanking (1842).

Britain occupies Hong Kong on January 26, 1841. 

Later in the year, the first census of the island will record a population of about seventy-five hundred.

The brief interlude in the fighting ends in the beginning of February after the Chinese refuse to reopen Canton to British trade.

On February 19, a longboat from HMS Nemesis comes under fire from a fort on North Wangtong Island, prompting a British response.

The British commanders order another blockade of the Pearl River and resume combat operations against the Chinese.

The British had captured the remaining Bogue forts on February 26 during the Battle of the Bogue and the Battle of First Bar on the following day, allowing the fleet to move further upriver towards Canton.

Admiral Taipei had been killed in action during the fighting on February 26.

The British destroy a Qing fort near Pazhou on March 2 and capture Whampoa (Pazhou Island), an action that directly threaten Canton's east flank.

Major General Gough, who had recently arrived from Madras aboard HMS Cruizer, has personally directed the attack on Whampoa.