Topic 10 - The External Factor

Question 1

How could one justify the rise of nationalism in the the early 20th century?

Answer 1

Westerners had special privileges because of discriminatory policies

Question 2

In what ways were foreigners present in China?

Answer 2

Fuerwerker, 2005:

• Armed forces
• Treaty ports
• Missionaries
• Public finance: Loans to Chinese governments
• Investment in infrastructure (e.g. railroads)

Question 3

Fuerwerker implies that the impact of westerners in China was significant but why could this not be true?

Answer 3

• Westerners never attempted a full-scale invasion of China (until Japan’s invasion of 1937)
• Westerners only really had economic and financial power in treaty ports
• Foreign investment as a percentage of GDP wasn’t that large
• Modern industry or transport established by Westerners did not always necessarily destroy their traditional counterpart but often complemented them

Question 4

What was Murphey’s analogy for Western Impact and Chinese response?

Answer 4

“… a fly could ultimately irritate its host enough to provoke a violent counter-reaction, but not to change the elephant’s basic nature”

Question 5

How did westerners affect China institutionally?

Answer 5

• They eroded the monopoly control of central political power in Qing China

Question 6

What could be used to argue that traditional Chinese commercial and business activities were built upon patronage?

Answer 6

Guilds or commercial organisation acquired the right to operate business often with monopoly privileges in exchange for a fixed tax quota (Motono, 2000)

Question 7

Detail the fall of the traditional commercial model.

Answer 7

• The Western imposition of a flat transit taxes for their goods through the inland led to an erosion of traditional commercial groups who relied on the payment of native transit taxes as a means to acquire monopoly privileges
• A pattern emerges that the Chinese merchants began to take advantage of these “Western privileges” through false registration of their produce as destined for export (rather than domestic use), flying their ships (or junks) in Western flags, investing their capital in Western business or simply registering their business under Western names
• These practices became the source of conflicts both at the government and business level

Question 8

What did the Treaty of Shimonoseki in 1896 mean for the traditional commercial model?

Answer 8

It allowed foreign business the right to manufacture in the treaty ports. Hence, the Qing had to grant broader property rights protection for all Chinese businesses.

Question 9

How did the International Settlement in Shanghai enhance the value of real estate in Shanghai?

Answer 9

• It protected property rights with low and standardised tax rates
• It invested in public goods such as roads and electric power

Question 10

What happened in the International Settlement after 1911?

Answer 10

It took over legal jurisdiction over the Chinese residents

Question 11

What is the similarity and difference between the Chinese City Council and the International Settlement?

Answer 11

The Chinese City Council was modelled after the IS but was suspended in 1914 by the Beijing government. But the IS expanded under the protection of Western treaties and Western gunboats.

Question 12

What was the most stable source of revenue for the government in early 20th century China?

Answer 12

Maritime Customs revenue

Question 13

Why was Maritime Customs revenue sparked from local warlords?

Answer 13

Because it was controlled by westerners

Question 14

How did the Chinese government us Maritime Customs revenue?

Answer 14

They used it as the security for foreign loans used to pay off Chinese government expenditures or war indemnities

Question 15

Why was the use of Maritime Customs limited for the Chinese government?

Answer 15

Customs revenue was collected by a foreign staffed agency and was deposited into foreign banks in treaty ports. Only the residuals were remitted to the Central government.

Question 16

What was extraterritoriality in modern China?

Answer 16

• Foreigners were exempted from the jurisdiction of Chinese laws, and were only adjudicated in the courts of their home countries
• This freedom from regulation was operated not only in the treaty ports alone but also elsewhere
• Chinese sovereignty diminished:
• > Foreigners can reside, own properties and engage in business under the extraterritorial jurisdiction
• > The inability of Chinese authority to restrain foreigners and firms

Question 17

What is the “New Chinese” class?

Answer 17

These were the Chinese that spoke English. They were native agents in treaty ports, they were educated and they were employed by Western firms. They took advantage of “unequal treaties”. (Motono, 2000)

Question 18

What is the Lijin Tax?

Answer 18

1) Present-day indirect tax
2) Imposed on Chinese merchants group
3) Collected along the routes at Lijin station
4) Foreign goods exempt (1853,Treaty of Tientsin)

Question 19

Why could it be said that foreign imports were detrimental to China?

Answer 19

Most imports served neither as inputs in Chinese production nor as capital goods to increase China’s productive capacity