Each country had its elegant building of office and storehouse combined, set apart by fences and fronting onto private landing places, the whole scene enlivened by a row of tall flagpoles, each carrying a national flag, a scene often depicted in silk paintings and on porcelain bowls.
The relations between the Chinese merchants and their foreign counterparts were good, and frequent grand dinners and lavish entertainments were held in a great hall at Chinese expense. One merchant in particular, Houqua, earned a popular reputation with his integrity and courtesy and was a great favourite with all the merchants. One of the first clipper type American ships was named after him in 1844.

   Despite the mutual understandings between the Chinese merchants and the foreigners, friction was constant with the government officials, occasioned for the most part by the persistent and iniquitous smuggling in of opium, the purchase of which was a drain on the Chinese silver, apart from its insidious effect on the population. Further irritation was caused by numerous small incidents with crew members on shore leave, and unfortunate deaths of local inhabitants resulting from the firing of the 'great guns' of passing ships in salute-a boisterous habit which also, at times, resulted in deaths of local inhabitants in British seaports.

   The Honourable Company had difficulties in offering fair and acceptable exchange for their Chinese cargoes, especially with silver bullion, and therefore the easy availability of opium from their Indian possessions provided a profitable solution even though officially the Company had prohibited the sale of opium in 1796, at the same time as the Chinese government forbade its import. The need for fast small ships to escape detection by war junks or pirates, and capable of running into smaller ports along the coast to prohibited areas of Northern China, brought about anew breed of ships. By the 1830s both America and Britain were involved, and on a small scale some other European countries. America introduced fast smart schooners and brigs based on the lines of their Baltimore clippers, and the British equally successful schooners built by yards experienced with large seagoing yachts; one such famous craft, the schooner Eamont, having a main boom 110 ft long. Another British vessel, the Falcon of three-llasted ship rig, had been built for Lord Yarborough as a yacht, and carried 22 guns. She was kept in perfect condition and manned with naval style discipline and efficiency like the East Indiamen.

  By 1834 the East India Company had lost its monopoly of the China trade owing to the constant pressure from other groups of merchants, and the rapidly expanding trade brought on the urge to enter all the other Chinese ports along the coast. Attempts to do this had been made on a diplomatic level, Britain sending an ambassador, Lord Macartney, to Peking in 1792 with costly presents for the Emperor.