The degree of foreign control of a given industry was slightly from Ch.$271.8 million to $293.4 million),holdings determined above all by the relationship of the industry to of foreign banks fell from Ch.$275.7 million to $42.7 foreign trade.A mercantile mentality dominated the treaty million-less than 1/6 their original level.As one author put it, ports of China,so that foreigners invested in areas which served "Financiers and speculators in China found it more profitable to increase the trade of China with their home country.Thus to export silver as a commodity than to use it in China as in 1936,16.8%of all foreign investment was directly in the capital."39 In the credit contraction which resulted,24 of 92 import-export trade,20.5%in the banking and finance Chinese textile mills suspended operations,40 and many firms institutions which served that trade,25.0%in transport,9.0% were forced to sell out to Japanese business interests.4 in treaty port real estate,5.1%in communications(telephone In general,foreign financial interests loaned substantial and telegraph)and public utilities,all largely for the benefit of sums to Chinese business enterprises only when their object the treaty port population,and only 19.6% in was to gain control of the enterprise.Such was the case with manufacturing. Even within that manufacturing total,some Japanese loans to the Hanyehping Coal and Iron Company in of the most important enterprises were closely linked to the early twentieth century.By 1915 and the Twenty One foreign trade.Cigarette production,for example,was 63.3% Demands,Japan was in a sufficiently strong position to foreign,and led to substantial imports of American tobacco. demand control of the company,which ultimately produced As one American commercial attache boasted:"With exclusively for the use of Japan's domestic steel industry.42 American salesmanship and American initiative it became The experience of the Kaiping coal mines was not so very possible to convert a tobacco producing and exporting nation different,except that even after substantial foreign loans in into one of the leading importers and consumers of American the 1890s,Herbert Hoover and his British employers were still tobacco products."33 obliged to engage in a great deal of legal finagling to capture Foreign investment's ancillary role to foreign trade led control of the Chinese company during the Boxer to a degree of geographic concentration which was clearly disturbance.43 inimical to the best interests of China's balanced economic Though much evidence has recently been marshalled in development.In 1931,76.6%of all foreign capital in China support of the proposition that foreign capitalism never was invested in cither Shanghai or Manchuria. Chinese "oppressed"native Chinese enterprises,and that it in fact industries then concentrated where foreigners had developed fostered the "coexistence"of the two forms of enterprise and public utilities and transport facilities,so that in 1930 61.5%, a rational division of the market,there is coniderablroom in 1931,53.7%and in 1932,61.0%of all newly registered left for doubt.Certainly it would be difficult to persuade the Chinese firms were located in the one province of Kiangsu.35 Chinese stockholders of either the Hanyehping or Kaiping Similarly,the foreign-built Chinese railway network was mines that imperialism had aided their native industries.In the notorious for its service to the political and commercial 1911 period,British diplomatic pressure was crucial in interests of the foreign powers,and its irrationality from the realizing the victory of the British Green Island Cement standpoint of China's own development.36 Perhaps the most Company over a local Chinese rival for the South China striking illustration of this was the Russia-built market.4s But diplomatic intervention was usually not Chinese-Eastern Railway and its connecting branch to Port necessary for foreign firms to crush their Chinese competitors. Arthur,which were built on the Russian guage to link with the In most cases their larger size,greater capitalization,longer trans-Siberian Railway,and conversely to prevent convenient experience,better access to raw materials and the ever-present linkage with the rest of China's railways.37 protection of extraterritoriality were sufficient to allow Banking and finance absorbed more direct foreign foreign firms to overwhelm Chinese competitors.Thus by investment than any other sector of the economy (investment 1905,two of three Chinese steamship companies organized in in transport being largely indirect,in the form of loans),and 1899-1900 to run between.Hankow and Changsha had folded foreign banks were notably disinterested in the economic after British and Japanese firms put ships on the route.46 development of China.Early in the twentieth century,the Perhaps foreign financiers demonstrated their power most American Minister to China,Paul S.Reinsch,complained that convincingly in their struggle during the last years of the Ch'ing to persuade the imperial government to take railway Tbe only American bank in Cbina,the International contracts away from the provincial Chinese companies and Banking Corporation,tben confined itself strictly to give them to a foreign consortium.The comparative"surplus" exchange business and to dealing in commercial paper;it of capital in the industrialized nations allowed them to offer bad developed no policy of responding to local industrial loans at far lower rates than those prevailing in China needs and belping in tbe inner development of China.All Therefore,from the Manchu government's point of view,it was the foreign banks bad wholly the treaty-port point of view. "cheaper"to have foreigners build the railways than Chinese. They thougbt not at all of developing interior regions upon As a result,the provincial railway companies were quashed and wbich the commerce of the treaty ports after all depends. the foreigners built China's railways. They were satisfied with scooping off the cream of The crucial proof of the depressing effects of foreign international commercial transactions and excbange capitalism on native Chinese industrial growth is unguestionably operations.3 to be found in China's experience during and immediately after World War I,when foreign competitors The foreign banks in Shanghai demonstrated the accuracy of diverted their attention from China to the war and then to the Reinsch's analysis by their behavior after the U.S.Silver reconstruction of Europe.Native Chinese industry and Purchase Act of 1934,which greatly inflated the gold value of handicrafts experienced their greatest growth in precisely this China's silver currency.Between December 1933 and period,when China was spared the impact of Western September 1935(while the silver stocks of Chinese banks rose economic intervention,and suffered its steepest decline in 12
The degre~ of foreign control of a given industry was determined above all by the relationship of the industry to foreign trade. A mercantile mentality dominated the treaty ports of China, so that foreigners invested in areas which served to increase the trade of China with their home country. Thus in 1936, 16.8% of all foreign investment was directly in the import-export trade, 20.5% in the banking and finance institutions which served that trade, 25.0% in transport, 9.0% in treaty port real estate, 5.1 % in communications (telephone and telegraph) and public utilities, all largely for the benefit of the treaty fort population, and only 19.6% in manufacturing. 2 Even within that manufacturing total, some of the most important enterprises were closely linked to foreign trade. Cigarette production, for example, was 63.3% foreign, and led to substantial imports of American tobacco. As one American commercial attache boasted: "With American salesmanship and American initiative it became possible to convert a tobacco producing and exporting nation into one of the leading importers and consumers of American tobacco products." 33 Foreign investment's ancillary role to foreign trade led to a degree of geographic concentration which was clearly inimical to the best interests of China's balanced economic development. In 1931, 76.6% of all foreign capital in China was invested in either Shanghai or Manchuria. 34 Chinese industries then concentrated where foreigners had developed public utilities and transport facilities, so that in 193061.5%, in 1931, 53.7% and in 1932, 61.0% of all newly registered Chinese firms were located in the one province of Kiangsu. 3S Similarly, the foreign-built Chinese railway network was notorious for its service to the political and commercial interests of the foreign powers, and its irrationality from the standpoint of China's own development. 36 Perhaps the most striking illustration of this was the Russia-built Chinese-Eastern Railway and its connecting branch to Port Arthur, which were built on the Russian guage to link with the trans-Siberian Railway, and conversely to prevent convenient linkage with the rest of China's railways. 37 Banking and finance absorbed more direct foreign investment than any other sector of the economy (investment in transport being largely indirect, in the form of loans), and foreign banks were notably disinterested in the economic development of China. Early in the twentieth century, the American Minister to China, Paul S. Reinsch, complained that Tbe only American bank in China, tbe International Banking Corporation, .tben confined itself strictly to exchange business and to dealing in commercial paper; it had developed no policy of responding to local industrial needs and belping in the inner development of Cbina. All tbe foreign hanks had wbolly tbe treaty-port point of view. They thought not at all ofdeveloping interior regions upon which the commerce of the treaty ports after all depends. They were satisfied with scooping off tbe cream of international commercial transactions and exchange operations. 38 The foreign banks in Shanghai demonstrated the accuracy of Reinsch's analysis by their behavior after the U.S. Silver Purchase Act of 1934, which greatly inflated the gold value of China's silver currency. Between December 1933 and September 1935 (while the silver stocks of Chinese banks rose 1Z slightly from Ch.$Z71.8 million to $Z93.4 million), holdings of foreign banks fell from Ch.$Z75.7 million to $42.7 million-less than 116 their original level. As one author put it, "Financiers and speculators in China found it more profitable to export silver as a commodity than to use it in China as capital." 39 In the credit contraction which resulted, 24 of 92 Chinese textile mills suspended operations,4O and many firms were forced to sell out to Japanese business interests. 41 In general, foreign financial interests loaned substantial sums to Chinese business enterprises only when their object was to gain control of the enterprise. Such was the case with Japanese loans to the Hanyehping Coal and Iron Company in the early twentieth century. By 1915 and the Twenty One Demands, Japan was in a sufficiently strong position to demand control of the company, which ultimately produced exclusively for the use of Japan's domestic steel industry. 42 The experience of the Kaiping coal mines was not so very different, except that even after substantial foreign loans in the 1890s, Herbert Hoover and his British employers were still obliged to engage in a great deal of legal finagling to capture control of the Chinese company during the Boxer disturbance. 43 Though much evidence has recently been marshalled in support of the proposition that foreign capitalism never "oppressed" native Chinese enterprises, and that it in fact fostered the "coexistence" of the two forms of enterprise and a rational division of the market,44 there is considerable room left for doubt. Certainly it would be difficult to persuade the Chinese stockholders of either the Hanyehping or Kaiping mines that imperialism had aided their native industries. In the 1911 period, British diplomatic pressure was crucial in realizing the victory of the British Green Island Cement Companls over a local Chinese rival for the South China market. S But diplomatic intervention was usually not necessary for foreign firms to crush their Chinese competitors. In most cases their larger size, greater capitalization, longer experience, better access to raw materials and the ever-present protection of extraterritoriality were sufficient to allow foreign firms to overwhelm Chinese competitors. Thus by 1905, two of three Chinese steamship companies organized in 1899-1900 to run between Hankow and Changsha had folded after British and Japanese firms put ships on the route. 46 Perhaps foreign financiers demonstrated their power most convincingly in their struggle during the last years of the Ch'ing to persuade the imperial government to take railway contracts away from the provincial Chinese companies and give them to a foreign consortium. The comparative "surplus" of capital in the industrialized nations allowed them to offer loans at far lower rates than those prevailing in China. Therefore, from the Manchu government's point of view, it was "cheaper" to have foreigners build the railways than Chinese. As a result, the provincial railway companies were quashed and the foreigners built China's railways. The crucial proof of the depressing effects of foreign capitalism on native Chinese industrial growth is unquestionably to be found in China's experience during and immediately after World War I, when foreign competitors diverted their attention from China to the war and then to the reconstruction of Europe. Native Chinese industry and handicrafts experienced their greatest growth in precisely this period, when China was spared the impact of Western economic intervention, and suffered its steepest decline in
1920-22 when the foreigners returned.47 these banks were not involved in promoting local industry,this Another argument often advanced by the apologists is capital was removed from the local economy to finance that foreign businesses induce a positive "imitation effect"in international trade or foreign exchange speculation.56 The the native economy:they teach by example and train the resources of these banks were further enhanced by their cadre for economic development.48 Unfortunately,the "right"to issue currency for domestic circulation in China-a foreigners-whose enterprises and attitudes were largely right claimed on the basis of extraterritoriality.Since these mercantile and often speculative4 -provided a very poor notes were issued with less than 100%reserves,"they were the model for a national bourgeoisie interested in development. equivalent to an interest-free loan from the Chinese public to Franz Fanon has commented with characteristic the foreign banks."57 perceptiveness on the weakness of a national bourgeoisie The gunboat-backed protection which extraterritoriality which imitates the Westerners with whom it comes in contact: provided for foreign enterprises often gave them a decisive It follows the Western bourgeoisie along its patb of advantage over Chinese competitors.Foreign insurance negation and decadence without even baving emulated it in companies,recognizing this fact,became an integral part of the system which virtually guaranteed foreign domination of its first stages of exploration and invention....In its China's internal steamship navigation.As one study put it: beginning,tbe national bourgeoisie of tbe colonial countries identifies with the decadence of the bourgeoisie of the ..it was the unwillingness of tbe foreign [insurance] West.so companies to insure junks wbicb frequently persuaded the Cbinese to sbip their goods by foreign vessels.Tbus tbe Finally,if one is to weigh the net effect of foreign investments advance of foreign sbipping in Cbina waters and foreign in China,it is essential to note that the net capital flow was not to but from China.Far more was repatriated in profits than insurance companies went band in band.In 1863 the British consul in Tiensin remarked tbat tbe 'principle of was ever invested or reinvested in China.The average marine insurance annibilates the native craft."Can you annual outpayment in the years 1902-1913 was U.S.$31.8 million,and in 1914-1930,U.S.$72.3 million.51 In the entire insure?"is a question wbich the Cbinese merchants period 1902-1930,the inflow/outflow ration was 0.57.52 invariably put.'58 This,of course,does not include the staggering cost of the At this point,the apologetic school will reply:this is Boxer and Japanese indemnities which China was forced to only one side of the coin,and the wrong side at that.The pay in the early years of the twentieth century.Feuerwerker critical issue is not the security which extraterritoriality has calculated that the cost,between 1895-1911,of provided for foreign enterprises,but the failure of the Chinese 476,982,000 taels for the Boxer indemnity and the loans to government to provide similar security for Chinese enterprises. pay the Japanese indemnity amount to "more than twice the The advantages enjoyed by the foreign banks are not as size of the total initial capitalization of all foreign, important as China's failure to develop a banking system Sino-foreign and Chinese owned manufacturing enterprises which would support her own economic development.The tax established between 1895 and 1913."53 advantages of foreign companies protected by exterritoriality are less worthy of attention than the excessive burden which To this point I have concentrated almost exclusively on the Chinese government placed on the modern sector of its economics.It is necessary,however,to realize that imperialism own economy.In short,"the idea that the unequal treaties was a total system-economic,political, social and prevented China's industrialization...is oversimple and cultural-and that its component parts were intimately inadequate to explain what happened.Decision lay first with interrelated.A key example is the institution of the Chinese government;only the government's default gave extraterritoriality,which in its basic sense was a political or the treaty port its later dominant role. juridical limitation of China's sovereignty-a removal of This is a serious,though fatally flawed argument,and it foreigners from the jurisdiction of the Chinese system of must be answered with some logical precision.In the first justice.Obviously,though,it had key economic consequences. place,concepts of economic security,economic advantage,or By exempting treaty port industries from most Chinese even tax advantage are clearly relative,and China's deficiency in taxation it gave them a considerable advantage. One these regards was significant only in comparison to Western calculation of the cost per bale of cotton yarn for Chinese enterprises protected by extraterritoriality-that is,she was and Japanese factories in China shows that taxes represented deficient only given the fact of imperialism.0 In the absence of 13.2%of the cost of production in the Japanese mill,and the network of foreign banks,insurance companies,steamship 34.3%in the Chinese. Beyond these tax advantages of companies and treaty port enterprises,Chinese capital,trade foreign industries was the considerable advantage of and entrepreneurial personnel would not have been absorbed exemption from arbitrary exactions by the Chinese by the treaty port economy which imperialism had created. government.It was these factors as much as any others which The "opportunity cost"-i.e.the cost in lost opportunities attracted a substantial amount of Chinese capital into foreign for healthy indigenous economic growth in China-was real enterprises.Thus extraterritoriality and treaty ports created and was directly attributable to the foreign presence.61 the conditions for an indirect attack on native Chinese Secondly,while it might be argued that the political and industries by channeling elsewhere the developmental capital military weakness of China allowed the foreign powers to needed by those Chinese enterprises.It has been estimated make their initial inroads in China during the nineteenth that in the 1890s 400 million taels in Chinese capital were century,once the foreigners were established,their very invested in foreign enterprises.ss The search for security under presence guaranteed the perpetuation of political weakness.A extraterritoriality also attracted substantial funds from strong China,capable of providing a political and economic Chinese depositors in foreign banks.Since,as we have noted, "environment conducive to domestic capital formation'62 13
• • • i 1920-22 when the foreigners returned. 47 these banks were not involved in promoting local industry, this Another argument often advanced by the apologists is capital was removed from the local economy to finance t that foreign businesses induce a positive "imitation effect" in international trade or foreign exchange speculation. 56 The the native economy: they teach by example and train the cadre for economic development. 48 Unfortunately, the foreigners-whose enterprises and attitudes were largely mercantile and often speculative 49 -provided a very poor model for a national bourgeoisie interested in development. Franz Fanon has commented with characteristic perceptiveness on the weakness of a national bourgeoisie which imitates the Westerners with whom it comes in contact: It follows tbe Western bourgeoisie along its patb of negation and decadence witbout even having emulated it in its first stages of exploration and invention.... In its beginning, tbe national bourgeoisie oftbe colonial countries Ulentifies witb tbe decadence of the bourgeoisie of the West. 50 Finally, if one is to weigh the net effect of foreign investments in China, it is essential to note that the net capital flow was not to but from China. Far more was repatriated in profits than was ever invested or reinvested in China. The average annual outpayment in the years 1902-1913 was U.S. $31.8 million, and in 1914-1930, U.S. $72.3 million. 51 In the entire period 1902-1930, the inflow/outflow ration was 0.57. 52 This, of course, does not include the staggering cost of the Boxer and Japanese indemnities which China was forced to pay in the early years of the twentieth century. Feuerwerker has calculated that the cost, between 1895-1911, of 476,982,000 taels for the Boxer indemnity and the loans to pay the Japanese indemnity amount to "more than twice the size of the total initial capitalization of all foreign, Sino-foreign and Chinese owned manufacturing enterprises established between 1895 and 1913."53 To this point I have concentrated almost exclusively on economics. It is necessary, however, to realize that imperialism was a total system-economic, political, social and cultural-and that its component parts were intimately interrelated. A key example is the institution of extraterritoriality, which in its basic sense was a political or juridical limitation of China's sovereignty-a removal of foreigners from the jurisdiction of the Chinese system of justice. Obviously, though, it had key economic consequences. By exempting treaty port industries from most Chinese taxation it gave them a considerable advantage. One calculation of the cost per bale of cotton yarn for Chinese and Japanese factories in China shows that taxes represented 13.2% of the cost of production in the Japanese mill, and 34.3% in the Chinese. S4 Beyond these tax advantages of foreign industries was the considerable advantage of exemption from arbitrary exactions by the Chinese government. It was these factors as much as any others which attracted a substantial amount of Chinese capital into foreign enterprises. Thus extraterritoriality and treaty ports created the conditions for an indirect attack on native Chinese industries by channeling elsewhere the developmental capital needed by those Chinese enterprises. It has been estimated that in the 1890s 400 million taels in Chinese capital were invested in foreign enterprises. S5 The search for security under extraterritoriality also attracted substantial funds from Chinese depositors in foreign banks. Since, as we have noted, resources of these banks were further enhanced by their "right" to issue currency for domestic circulation in China-a right claimed on the basis of extraterritoriality. Since these I notes were issued with less than 100% reserves, "they were the equivalent to an interest-free loan from the Chinese public to the foreign banks." 57 1 The gunboat-backed protection which extraterritoriality provided for foreign enterprises often gave them a decisive advantage over Chinese competitors. Foreign insurance companies, recognizing this fact, became an integral part of the system which virtually guaranteed foreign domination of China's internal steamship navigation. As one study put it: ... it was the umDiIlingness of the foreign [insurance] companies to insure junks which frequently persuaded the Cbinese to ship their goods by foreign vessels. Thus the advance of foreign shipping in China waters and foreign insurance companies went hand in hand. In 1863 the British consul in Tiensin remarked that the 'principle of marine insurance annihilates the native craft. "Can you insure?" is a 1uestion which the Chinese merchants invariably put.• 5 At this point, the apologetic school will reply: this is only one side of the coin, and the wrong side at that. The critical issue is not the security which extraterritoriality provided for foreign enterprises, but the failure of the Chinese government to provide similar security for Chinese enterprises. The advantages enjoyed by the foreign banks are not as important as China's failure to develop a banking system which would support her own economic development. The tax advantages of foreign companies protected by exterritoriality are less worthy of attention than the excessive burden which the Chinese government placed on the modern sector of its own economy. In short, "the idea that the unequal treaties prevented China's industrialization ... is oversimple and inadequate to explain what happened. Decision lay first with the Chinese government; only the government's default gave the treaty port its later dominant role." 59 This is a serious, though fatally flawed argument, and it must be answered with some logical precision. In the first place, concepts of economic security: economic advantage, or even tax advantage are clearly relative, and China's deficiency in these regards was significant only in comparison to Western enterprises protected by extraterritoriality - that is, she was deficient only given the fact of imperialism. 60 In the absence of the network of foreign banks, insurance companies, steamship companies and treaty port enterprises, Chinese capital, trade and entrepreneurial personnel would not have been absorbed by the treaty port economy which imperialism had created. The "opportunity cost" - i.e. the cost in lost opportunities for healthy indigenous economic growth in China - was real and was directly attributable to the foreign presence. 61 Secondly, while it might be argued that the political and military weakness of China allowed the foreign powers to make their initial inroads in China during the nineteenth century, once the foreigners were established, their very presence guaranteed the perpetuation of political weakness. A strong China, capable of providing a political and economic "environment conducive to domestic capital formation" 62 13
was inconceivable given the fact of imperialism in China.The opened up options for others.If Yuan Shih-k'ai had not had foreign presence,far from providing a solution,lay at the root the imperialists to turn to for his Reorganization Loan in of the problem.While the coexistence,claimed by the 1913,he would have had to come to terms with the apologists,of domestic and foreign industry in China was at Kuomintang and the reformist gentry leaders who had led the least theoretically possible,the coexistence of a strong fight against foreign railway loans in the spring of 1911,and sovereign China and a foreign presence over which she has no had guided the revolution which brought down the Ch'ing in jurisdiction or control was a logical impossibility. the fall.Foreign financial support allowed Yuan to by-pass and This conclusion proceeds from the very nature of ultimately overwhelm this province-based gentry nationalism sovereignty.To the extent that the foreign powers limited The imperialists'role during the warlord era was scarcely China's sovereignty,they inevitably weakened her politically more progressive.To be sure,the powers regretted the Every concession which the foreigners wrung from the disruption of trade which warlordism produced.One must also reluctant Ch'ing-from the rights of missionaries to spheres of admit that other than Japanese aid to Chang Tso-lin and Tuan influence-reduced the legitimacy of the dynasty in the eyes of Ch'i-jui the extent of imperialist support for particular the Chinese population.By the first decade of the twentieth warlords is still an open question.Nonetheless,by bestowing century,the Ch'ing was reduced to little more than a despised the legitimacy of diplomatic recognition and the revenues of tax-collecting agency for the foreign powers.Nearly one-half the Customs administration on anyone who succeeded in of the imperial government's revenue was devoted to loan capturing Peking,the powers encouraged the game of musical service and indemnity payments.63 Now if China had been chairs which the warlord governments played in Peking.The able to increase her import tariff,she might have been able economics of imperialism made it more profitable for a both to meet these obligations and assist indigenous economic warlord to capture Peking than to straighten out the finances development.(In the years between China's tariff autonomy in and develop the economy of the area which he controlled 1929 and the onset of the Sino-Japanese War,China's tariff When he did concern himself with his local base,the warlord receipts increased roughly five-fold in spite of the effects of demonstrated one of the clearest lessons learned from the world depression on foreign trade.)4 But in the nincteenth West:there is money in opium.The cultivation of "foreign and early twentieth centuries,the West set China's tariffs,and mud,"as it was called,was encouraged as a key source of China suffered accordingly,both politically and financially. many warlords'tax revenues.Imperialism,then,was an To turn from the macroscopic to the microscopic,one integral part of the process which led to China's political final example might illustrate how imperialism helped to make disintegration in the first half of the twentieth century.To the China ungovernable.The Sino-British Mackay Treaty of 1902 extent that political collapse intensified the effects of flood, provided that foreign firms be given three weeks notice of any drought and famine in the '20s,'30s,and '40s,imperialism prohibition of rice exports from one locality to another.The contributed to the impoverishment of the Chinese peasantry terms of this treaty were cited by the British in 1906 to prevent a prohibition of exports from Hunan,which Ch'ing This essay has mentioned a series of distinct economic, officials had desired during a flood-induced famine.Later social and political effects of imperialism in China.For when a major popular uprising occurred,the British Consul analytical purposes,it has been necessary to isolate the various explained that "much as I sympathize with any measure effects of the foreign presence.Now,however,it is necessary tending to alleviate the distress of the famine-stricken people, to tie the separate pieces together and to assess the total it was nevertheless my duty to see that Treaty stipulations impact of imperialism on China.Imperialism came to China as were compled with."s Four years later the same situation an unwelcome intruder:pushing opium,Christianity and arose again:the British insisted that three weeks of exports be cotton yarn.The opium enhanced political corruption and allowed,the price of rice soared,and the famous Changsha moral decay;the Christianity threatened the values and the rice riot of 1910 resulted,taking both foreign missions and status of the gentry;and the yarn deprived handicraft businesses and Chinese government offices and schools as its spinners of their livelihood.Many suffered,a few were helped, targets.Foreign restrictions on China's sovereignty were such and the people blamed the government for its failure to that the government was often totally powerless to prevent adequately deal with the intruders.The government,unable to such outbreaks of popular discontent. rid the country of the imperialists,ultimately found itself Just as the unequal treaties sometimes tied the hands of relying on them to collect Customs revenues,help suppress the the Chinese government,so the knowledge and fear of the Taiping and lesser rebellions,and provide financial assistance foreign threat often severely limited the options open to the in the form of loans.The imperialist powers,for their part, Chinese government.In the nineteenth century,such officials were willing to offer sufficient support to conservative as Li Hung-chang,a man fully committed to economic and governments to maintain the status quo with a modicum of military self-strengthening,objected to the construction of political stability,but were quite unwilling (and unable)to aid railways not on the superstitious grounds that they would in the creation of a political regime capable of restoring full disturb feng-sbui,but on the very realistic grounds that they sovereignty to China.In the realm of economics,the energies would provide the means for foreign military invasion.66 of imperialism were directed toward the profitable Turning to politics in the twentieth century,there can be no development of China's foreign trade and such ancillary doubt that the leaders of the 1911 Revolution felt compelled industries as seemed to serve that general end.While they were to make their revolution acceptable to the foreign powers in hardly successful in fundamentally restructuring China's order to prevent intervention or even partition by the massive agrarian economy in the direction of foreign trade, imperialists.Inevitably this meant tempering whatever radical they skewed the modern sector of the economy in that nationalism was present in the revolutionary movement. direction and in so doing produced a type of "false If the imperialists closed options for some,they also modernization"which had little or no hope of producing 14
was inconceivable given the fact of imperialism in China. The foreign presence, far from providing a solution, lay at the root of the problem. While the coexistence, claimed by the apologists, of domestic and foreign industry in China was at least theoretically possible, the coexistence of a strong sovereign China and a foreign presence over which she has no jurisdiction or control was a logical impossibility. This conclusion proceeds from the very nature of sovereignty. To the extent that the foreign powers limited China's sovereignty, they inevitably weakened her politically. Every concession which the foreigners wrung from the reluctant Ch'ing-from the rights of missionaries to spheres of influence-reduced the legitimacy of the dynasty in the eyes of the Chinese population. By the first decade of the twentieth century, the Ch'ing was reduced to little more than a despised tax-collecting agency for the foreign powers. Nearly one-half of the imperial government's revenue was devoted to loan service and indemnity payments. 63 Now if China had been able to increase her import tariff, she might have been able both to meet these obligations and assist indigenous economic development. (In the years between China's tariff autonomy in 1929 and the onset of the Sino-Japanese War, China's tariff receipts increased roughly five-fold in spite of the effects of world depression on foreign trade.)64 But in the nineteenth and early twentieth centuries, the West set China's tariffs, and China suffered accordingly, both politically and financially. To turn from the macroscopic to the microscopic, one final example might illustrate how imperialism helped to make China ungovernable. The Sino-British Mackay Treaty of 1902 provided that foreign firms be given three weeks notice of any prohibition of rice exports from one locality to another. The terms of this treaty were cited by the British in 1906 to prevent a prohibition of exports from Hunan, which Ch'ing officials had desired during a flood-induced famine. Later when a major popular uprising occurred, the British Consul explained that "much as I sympathize with any measure tending to alleviate the distress of the famine-stricken people, it was nevertheless my duty to see that Treaty stipulations were compled with."65 Four years later the same situation arose again: the British insisted that three weeks of exports be allowed, the price of rice soared, and the famous Changsha rice riot of 1910 resulted, taking both foreign missions and businesses and Chinese government offices and schools as its targets. Foreign restrictions on China's sovereignty were such that the government was often totally powerless to prevent such outbreaks of popular discontent. Just as the unequal treaties sometimes tied the hands of the Chinese government, so the knowledge and fear of the foreign threat often severely limited the options open to the Chinese government. In the nineteenth century, such officials as Li Hung-chang, a man fully committed to economic and military self-strengthening, objected to the construction of railways not on the superstitious grounds that they would disturb [eng-shui, but on the very realistic grounds that they would provide the means for foreign military invasion. 66 Turning to politics in the twentieth century, there can be no doubt that the leaders of the 1911 Revolution felt compelled to make their revolution acceptable to the foreign powers in order to prevent intervention or even partition by the imperialists. Inevitably this meant tempering whatever radical nationalism was present in the revolutionary movement. If the imperialists closed options for some, they also opened up options for others. If Yuan Shih-k'ai had not had the imperialists to turn to for his Reorganization Loan in 1913, he would have had to come to terms with the Kuomintang and the reformist gentry leaders who had led the figh t against foreign railway loans in the spring of 1911, and had guided the revolution which brought down the Ch'ing in the fall. Foreign financial support allowed Yuan to by-pass and ultimately overwhelm this province-based gentry nationalism. The imperialists' role during the warlord era was scarcely more progressive. To be sure, the powers regretted the disruption of trade which warlord ism produced. One must also admit that other than Japanese aid to Chang Tso-lin and Tuan Ch'i-jui the extent of imperialist support for particular warlords is still an open question. Nonetheless, by bestowing the legitimacy of diplomatic recognition and the revenues of the Customs administration on anyone who succeeded in capturing Peking, the powers encouraged the game of musical chairs which the warlord governments played in Peking. The economics of imperialism made it more profitable for a warlord to capture Peking than to straighten out the finances and develop the economy of the area which he controlled. When he did concern himself with his local base, the warlord demonstrated one of the clearest lessons learned from the West: there is money in opium. The cultivation of "foreign mud," as it was called, was encouraged as a key source of many warlords' tax revenues. Imperialism, then, was an integral part of the process which led to China's political disintegration in the first half of the twentieth century. To the extent that political collapse intensified the effects of flood, drought and famine in the '20s, '30s, and '40s, imperialism contributed to the impoverishment of the Chinese peasantry. * * * This essay has mentioned a series of distinct economic, social and political effects of imperialism in China. For analytical purposes, it has been necessary to isolate the various effects of the foreign presence. Now, however, it is necessary to tie the separate pieces together and to assess the total impact of imperialism on China. Imperialism came to China as an unwelcome intruder: pushing opium, Christianity and cotton yarn. The opium enhanced political corruption and moral decay; the Christianity threatened the values and the status of the gentry; and the yarn deprived handicraft spinners of their livelihood. Many suffered, a few were helped, and the people blamed the government for its failure to adequately deal with the intruders. The government, unable to rid the country of the imperialists, ultimately found itself relying on them to collect Customs revenues, help suppress the Taiping and lesser rebellions, and provide financial assistance in the form of loans. The imperialist powers, for their part, were willing to offer sufficient support to conservative governments to maintain the status quo with a modicum of political stability, but were quite unwilling (and unable) to aid in the creation of a political regime capable of restoring full sovereignty to China. In the realm of economics, the energies of imperialism were directed toward the profitable development of China's foreign trade and such ancillary industries as seemed to serve that general end. While they were hardly successful in fundamentally restructuring Cll-ina's massive agrarian economy in the direction of foreign trade, they skewed the modern sector of the economy in that direction and in so doing produced a type of "false modernization" which had little or no hope of producing 14