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In 1846 Labuan, the northern part of Borneo, was ceded to Great Britain by the Sultan of Borneo, and owing to the influence of Sir James Brooke a settlement was at once formed. Now it also, like Singapore, forms an important commercial station, and transmits to both China and Europe the produce of Borneo and the Malay Archipelago.

Owing to the opening of seaports in Northern China for foreign trade in 1842, the growing Russian influence in the Northern Pacific and many other circumstances caused England to perceive the necessity of having a naval depôt and commercial harbour on the Tong Hai and on the Yellow Sea. England was doubtless casting her eyes upon the Chusan Island or some other island in the Chusan Archipelago, but did not dare to occupy any one of them lest she should thereby offend the chief trading nation of that quarter, viz., China.

However, in 1885 England annexed Port Hamilton, on the southern coast of the Corea, during the threatened breach with Russia on the Murghab question.