China: forced trade with the western powers of Europe

Until the nineteenth century China was a much bigger and more powerful state than any in Europe or Asia. See history of China 1368-1968. Its technical precocity and meritocratic bureaucracy gave it higher levels of income than Europe from the fifth to the fourteenth century (see Figure 1–4). Thereafter Europe slowly forged ahead in terms of per capita income, but Chinese population grew faster. Chinese GDP in 1820 was nearly 30 per cent higher than that of Western Europe and its Western Offshoots combined. In the first three centuries of European trade expansion, China had been much more difficult to penetrate than the Americas, Africa or the rest of Asia. Such trade as there was, was on conditions laid down by China.

Between the 1840s and 1940s, China’s economy collapsed. Per capita GDP in 1950 was less than threequarters of the 1820 level. Population growth was interrupted by major military conflict. In 1950, China’s GDP was less than a twelfth of that in Western Europe and the Western Offshoots. The period of China’s decline coincided with commercial penetration by foreign powers and the Japanese attempt at conquest. There are clear links between the two processes, but there were also internal forces which contributed to China’s retrogression.

China turned its back on the world economy in the early fifteenth century, when its maritime technology was superior to that of Europe (see Table 2–11). Thereafter it was left without naval defences. China’s highly educated elite showed no interest in the technological development and military potential of Western Europe. A British mission in 1793 tried to open diplomatic relations and demonstrate the attractions of western science and technology with 600 cases of presents (including chronometers, telescopes, a planetarium, chemical and metal products). The official rebuff stated “there is nothing we lack — we have never set much store on strange or ingenious objects, nor do we want any more of your country’s manufactures.” China did not start establishing legations abroad until 1877.

The Manchu dynasty was in a state of collapse from the mid–nineteenth century, and the Kuomintang regime which followed was equally incompetent. The dynastic collapse paralleled that of the Moghul regime in India, which led to British takeover there. However, Western colonialism in China was very different from that in India, and it was Japan, not the Western colonial powers, which attempted conquest.

Colonial penetration was inaugurated with the capture of Hong Kong by British gunboats in 1842. The immediate motive was to guarantee free access to Canton to exchange Indian opium for Chinese tea. A second Anglo–French attack in 1858–60 opened access to the interior of China via the Yangtse and the huge network of internal waterways which debouched at Shanghai.

This was the era of free trade imperialism. Western traders were individual firms, not monopoly companies. In sharp contrast to their hostile and mutually exclusive trade regimes in the eighteenth century, the British and French had made their Cobden–Chevalier Treaty to open European commerce on a most–favoured–nation basis. They applied the same principle in the treaties imposed on China. Hence 12 other European countries, Japan, the United States, and three Latin American countries acquired the same trading privileges before the first world war.

The treaties forced China to maintain low tariffs. They legalised the opium trade. They allowed foreigners to travel and trade in China, giving them extra–territorial rights and consular jurisdiction in 92 “treaty ports” which were opened between 1842 and 1917. To monitor the Chinese commitment to low tariffs, a Maritime Customs Inspectorate was created (with Sir Robert Hart as Inspector General from 1861 to 1908) to collect tariff revenue for the Chinese government. A large part of this was earmarked to pay “indemnities” which the colonialists demanded to defray the costs of their attacks on China. The centre of this multilateral colonial regime was the international settlement in Shanghai. The British picked the first site in 1843 north of the “native city”. The French, Germans, Italians, Japanese and Americans had neighbouring sites along the Whangpoo river opposite Pudong, with extensive grounds for company headquarters, the cricket club, country clubs, tennis clubs, swimming pools, the race course, the golf club, movie theatres, churches, schools, hotels, hospitals, cabarets, brothels, bars, consulates and police stations of the colonial powers. There were similar facilities, on a smaller scale, in Tientsin and Hankow. Most of the Chinese allowed into these segregated settlements were servants.

Apart from the British colony of Hong Kong, there were five “leased” territories ceded to Britain, France, Germany, Japan and Russia. These included Britain’s 100 year lease on the New Territories adjacent to Hong Kong, granted in 1898.

Foreign residents and trading companies were the main beneficiaries of this brand of free trade imperialism and extra–territorial privilege. The settlements were glittering islands of modernity, but the character of other Chinese cities did not improve, and those which had been damaged by the massive Taiping rebellion of 1850–64 had deteriorated. Chinese agriculture was not significantly affected by the opening of the economy, and the share of exports in Chinese GDP was small (0.7 per cent of GDP in 1870, 1.2 per cent in 1913) — much smaller than in India. China regained its tariff autonomy in 1928 and there was some relaxation of other constraints on its sovereignty in the treaty ports. However, this was offset by intensified pressures from Japan.

The biggest intrusions into Chinese sovereignty and the biggest damage to its economy came from Japan. In the 1590s, Hideyoshi had made an earlier attempt to attack China by invading Korea, and the Meiji regime repeated this strategy with greater success in 1894–5.

There was a gradual build–up of pressure from the 1870s, when Japan sent a punitive force to Taiwan and asserted its suzerainty over the Ryuku islands (Okinawa). In 1876 a Japanese naval force entered Korea and opened the ports of Pusan, Inchon and Wonsan to Japanese consular jursidiction. In 1894, Japan declared war on Korea, and its forces crossed the Yalu river into China. In the Treaty of Shimonoseki, 1895, China was forced to recognise that its suzerainty over Korea had lapsed, Taiwan and the Pescadores were ceded to Japan. Japanese citizens (and hence other foreigners) were now permitted to open factories and manufacture in China. China was forced to pay an indemnity which amounted to a third of Japanese GDP, which China had to finance by foreign borrowing. This sparked off an avalanche of further foreign claims, and a Chinese declaration of war on the foreign powers in 1900. Within two months China was defeated by joint action of the foreign powers and Russia occupied Manchuria. Japan defeated Russia in the war of 1905, and took over Southern Manchuria. Korea became a Japanese protectorate, and in 1910 a Japanese colony.

Japan took Manchuria in 1931 and established a puppet state (Manchukuo) in 1933 which incorporated China’s three Manchurian provinces, parts of Inner Mongolia, Hopei and Liaoning. China was obliged to turn the area around Peking and Tientsin into a demilitarised zone, which left North China defenceless. In July 1937, the Japanese attacked again. They presumably expected to take over the whole of North China after a short campaign, and thereafter to dominate a compliant government in the South as part of their new order in Asia. However, the Chinese government reacted strongly, and the war with Japan lasted for eight years. Its impact was compounded by the civil war between the Kuomintang and communist forces. Thus China endured 12 years of war from 1937 to 1949. The destructive impact was similar proportionately to that of the Taiping rebellion of 1850–64.

Mis à jour le 12/05/2016 pratclif.com