How did the Chinese government respond to the British opium trade?

They started dumping the shipments into the sea, eventually provoking the Opium Wars.

Opium trade, in Chinese history, the traffic that developed in the 18th and 19th centuries in which Western countries, mostly Great Britain, exported opium grown in India and sold it to China. The British used the profits from the sale of opium to purchase such Chinese luxury goods as porcelain, silk, and tea, which were in great demand in the West.