  Different regional reactions to war in 1894 and 1900 can significantly impact
Chinese imports in 2001. As international relationship gets tense and China
rises, international conflicts could decrease trade.We analyze impact of
historic political conflict. We measure regional change of number of people
passing imperial exam because of war. War leads to an unsuccessful reform and
shocks elites. Elites in different regions have different ideas about
modernization, and the change of number of people passing exam is quite
different in different regions after war. Regional number of people passing
exam increases 1% after war, imports from then empires decrease 2.050% in 2001,
and this shows impact of cultural barrier. Manufactured goods can be impacted
because brands can be identified easily. Risk aversion of expensive products in
conservative regions can increase imports of equipment. Value chains need deep
trust, and this decreases imports of foreign company and assembly trade.
