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France suffered from extreme deficit spending. Deficit spending is when the government spends more money than it has at the time. This was only one of the many problems in France. Wars, such as the Seven Years' War and the American Revolution, also had a large impact on France's economic state. France also kept going further and further into debt, by borrowing more and more money to bridge the gap between income and expenses. In 1789, France's government spent half of its income to pay the interest of the enormous debt. Bad harvests in the late 1780's brought hunger to the poorer peasants and city dwellers.

In attempts to fix their economic crisis, France would have to increase taxes, reduce expenses or both. But the Nobles and Clergy couldn't bear the thought of losing their exemption from taxes.

__**Problems with Trade**__

Every country aims for a balance in trade, or the reference between how much a country exports and how much it imports. Before the 1800's, Chinese rulers had a strict limit on foreign traders. A small area of southern China was the only place that European merchants could trade. China sold the Europeans silk, porcelain and tea in exchange for gold and silver. Because of such strict limits China was a victim of trade surplus, which is when a country exports more than it imports. Everybody who traded with China then suffered from a trade deficit, which is when a country imports more than it exports.

__**Opium War**__

British merchants were met by Chinese warships, which triggered the Opium War. The Opium War was between China and Britain, in 1839. British merchants made huge profits selling opium from India and trading it for Chinese tea.