title: The State Economic Policies of the Ch'ing Government, 1840-1895.
Creators: name: Ch'en, Chih-jang
Publisher: name: School of Oriental and African Studies, University of London
Year: 1956

description: In the decade preceding and in those following the Opium War of 1840 and 1841, China's position in international trade was reversed - from that of a sizeable surplus per year to that of a large deficit. The cause was, at first, the import of immense quantities of opium and the aftermath, the outflow of silver. China is not a silver-producing country, but silver was used as a currency side by side with the copper cash. The efflux of silver resulted in a disparity in the exchange rate between the two monies which in turn was responsible for many economic dislocations of the time. Seeing the root of her economic illness, China tried to stop the inflow of opium, first by legal means, and then by force against England. And China was defeated. The Opium War is generally recognised as the starting point of Chinese modern history; yet its economic significance has scarcely been properly assessed. Mr.M. Greenburg (1) has, mainly based on the Jardine Papers, given a lucid account of the processes of the opening of China in the years immediately around the war. My humble attempt here is to describe the manner in which China responded to the opening. I rely chiefly on Chinese sources. From 1840 to 1895, the Ch'ing Government had, I think, held a con tent view of China's economic weakness and pursued a set of coherent policies as its cure. The policy-makers firmly believed that the key to the situation was to bridge the trade gap, yet they war e denied the ability to use protective tariff by the Nanking, and other Treaties. This, however, does not say that they did not endenvour to resort to higher duties in order to discourage import. On the contrary, they found, not purposefully perhaps, that likin a form of excise tax - could achieve this end to some extent. Likin became particularly effective in reducing the import of opium. Apart from likin, the officialdom of Ch'ing unfolded a campaign which is known as the T'ung-chih Revival or the Self-Strengthening Movement. Its essence was to establish a few key industries and to develop commerce in order to stop the "leak" (of silver) abroad through trade with the ultimate aim of enhancing the State power. The high officials were convinced that all that China needed was to copy western industrial techniques, so she could herself produce the imported goods - such as arms and amunitions, iron and steel products, ships and cloth. While trying to procure these, Chinese cultural tradition, which was considered to be ideal, should be left intact. The tradition is, to use Chang chih-tung's famous word, the "body" which must not be affected by the borrowed techniques which, again according to Chang, are the "limbs" and are merely for practical uses. This view is obviously wrong. Western industrial and commercial "techniques" could not be transplanted and prosper in an atmosphere of agricultural distress, lack of capital and a corrupt administration. Therefore the "pure" economic measures of the period 1340-1895 resulted in a complete failure. From 1895 onwards the crescendo of the strengthening movement shifted into the sphere of politics - a chapter in Chinese modern history thus ended.