Economy of Qing Empire

Description of the economic situation in the Qing empire. State control over the economy. Impact on its development Opium Wars. Thermos trade policy of the government. Causes and consequences of the economic crisis. Enforcement of a foreign sector.

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MINISTRY OF EDUCATION AND SCIENCE OF THE REPUBLIC OF KAZAKHSTAN

INTERNATIONAL INFORMATION TECHNOLOGIES UNIVERSITY

DEPARTMENT OF MANAGEMENT AND SOCIAL SCIENCES

COURSE WORK

on topic УEconomy of Qing EmpireФ

ALMATY - 2012

Contents

Introduction

I. Economy of Qing Empire

Economy during the early Qing

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II. State control of the economy

Isolationist trade policy

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The –азмещено на http://www.allbest.ru/

Opium Wars

III. Qing Empire in the system of world trade

Russian-Qing economic relation

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Enforcement of a foreign sector

IV. Economical crisis –азмещено на http://www.allbest.ru/

(1909-1913)

Conclusion

References

Introduction

The Qin dynasty, after unifying the territory later known as "China", took some contradictory measures to enhance the economical productivity of the empire. On the one side, money and weights and measures were standardized throughout all commanderies, leading to smoother transactions over longer distances. On the other side, the First Emperor and his successors ordered gigantic construction work in the Capital Xianyang and its surroundings as well as in other parts of the empire. The tomb of the First Emperor, the Epang Palace and the Great Wall are the most famous examples. Higher taxes and intensive corvee labour required from the peasants prevented the "national economy" from reposing after decades if not centuries of permanent warfare.

The economic policy of the Qin was compared by the early Han period writer Jia Yi with that of a wartime economy kept running even in peacetime. The exploitation of the peasantry finally lead to uprisings that would bring the downfall of the dynasty. The economic history of China stretches over thousands of years and has undergone alternating cycles of prosperity and decline. According to the book 'China and the Knowledge Economy: Seizing the 21st century', China was for a large part of the last two millennia the world's largest economy, even though its wealth remained average. China's history is usually divided into three periods: The pre-imperial era, consisting of the era of before the unification of Qin, the early imperial era from Qin to Song, and the late imperial era, marked by the economic revolution that occurred during the Song Dynasty.

By roughly 10,000 BCE, in the Neolithic Era, agriculture was practiced in China. Stratified bronze-age cultures, such asErlitou, emerged by the third millennium BCE. Under the Shang (c. 1600-1045 BCE) and Zhou (1045-771 BCE), a dependent labor force worked in large-scale foundries and workshops to produce bronzes and silk for the elite. The agricultural surpluses produced by the manorial economy supported these early handicraft industries as well as urban centers and considerable armies. This system began to disintegrate after the collapse of the Western Zhou Dynasty in 771 BCE, preceding the Spring and Autumn and Warring states eras.

As the feudal system collapsed, much legislative power was transferred from the nobility to local kings. A merchant class emerged during the Warring States Period, resulting in increased trade. The new kings established an elaborate bureaucracy, using it to wage wars, build large temples, and perform public works projects. This new system rewarded talent over birthright; important positions were no longer occupied solely by nobility. The adoption of new iron tools revolutionized agriculture and led to a large population increase during this period. By 221 BCE, the state of Qin, which embraced reform more than other states, unified China, built the Great Wall, and set consistent standards of government. Although its draconian laws led to its overthrow in 206 BCE, the Qin institutions survived. During the Han Dynasty, China became a strong, unified, and centralized empire of self-sufficient farmers and artisans, though limited local autonomy remained. The Song Dynasty (960-1279 CE) brought additional economic reforms. Paper money, the compass, and other technological advances facilitated communication on a large scale and the widespread circulation of books. The state's control of the economy diminished, allowing private merchants to prosper and a large increase in investment and profit. Despite disruptions during the Mongol conquest of 1279, the population much increased under the Ming Dynasty and Qing Dynasty, but its GDP per capita remained static since then. In the later Qing period, China's economic development began to slow and Europe's rapid development since the Late Middle Ages and Renaissance enabled it to surpass China--an event known as the Great Divergence.

I. Economy of Qing Empire

A handful of factors lead to a fast population growth during the mid of Qing period. The first source for the population growth was of course the economical prosperity under the century of the three Emperors Kangxi, Yongzheng and Qianlong (abbreviated to Kang Yong Qian Sanchao НNк§иіР≥К£ОOТ©). During the whole course of Chinese history, the lack of arable land in the densely populated areas made it necessary to invent new techniques of agriculture to harvest as much as possible from a small amount of land. In the 18th century, Chinese agriculture was the most advanced of the world - but the cheapness of labour force in a densely populated land was an impediment for the widespread use of machinery on the countryside - until nowadays. New fruits from the Americas helped the Chinese population to obtain a better nourishment: potoatoes (tudou УyУ§), peanuts (huasheng Й‘Рґ), sorghum millet (gaoliang НВвл), corn (mais; yumi Л Хƒ or bangzi Ц_Оq). Additionally, crops that can be used in industrial agriculture (plantations), like tea (cha ТГ; Fujian dialects: de), cotton (mian Ц«), and sugar cane (jian СE), stimulated private entrepreneurship and employment.

Until 1770, the tax for the small peasants was the lowest of the whole history of China, and the whole countryside during the mid-Qing period seemed to be blessed with a relative high living standard and an education system that allowed many wealthy peasants to learn the basics of reading and writing. The crafts and minor industries in the cities were equally much higher developed in China than in Europe. Textile industry first provided an extra income to the peasant families, but later developed to a separate industrial branch with factory workers, especially in Songjiang ПЉН] near later Shanghai, Suzhou СhПB/Jiangsu and Hangzhou НYПB/Zhejiang - a city famous for its silk production. Tea plantations in Zhejiang and Fujian did not only deliver their products to all places in China, but produced also goods for export to Europe, especially England.

The Qin dynasty, after unifying the territory later known as "China", took some contradictory measures to enhance the economical productivity of the empire. On the one side, money and weights and measures were standardized throughout all commanderies, leading to smoother transactions over longer distances. On the other side, the First Emperor and his successors ordered gigantic construction work in the Capital Xianyang and its surroundings as well as in other parts of the empire. The tomb of the First Emperor, the Epang Palace and the Great Wall are the most famous examples. Higher taxes and intensive corvee labour required from the peasants prevented the "national economy" from reposing after decades if not centuries of permanent warfare.

The economic policy of the Qin was compared by the early Han period writer Jia Yi with that of a wartime economy kept running even in peacetime. The exploitation of the peasantry finally lead to uprisings that would bring the downfall of the dynasty. The economic history of China stretches over thousands of years and has undergone alternating cycles of prosperity and decline. According to the book 'China and the Knowledge Economy: Seizing the 21st century', China was for a large part of the last two millennia the world's largest economy, even though its wealth remained average. China's history is usually divided into three periods: The pre-imperial era, consisting of the era of before the unification of Qin, the early imperial era from Qin to Song, and the late imperial era, marked by the economic revolution that occurred during the Song Dynasty.

By roughly 10,000 BCE, in the Neolithic Era, agriculture was practiced in China. Stratified bronze-age cultures, such asErlitou, emerged by the third millennium BCE. Under the Shang (c. 1600-1045 BCE) and Zhou (1045-771 BCE), a dependent labor force worked in large-scale foundries and workshops to produce bronzes and silk for the elite. The agricultural surpluses produced by the manorial economy supported these early handicraft industries as well as urban centers and considerable armies. This system began to disintegrate after the collapse of the Western Zhou Dynasty in 771 BCE, preceding the Spring and Autumn and Warring states eras.

As the feudal system collapsed, much legislative power was transferred from the nobility to local kings. A merchant class emerged during the Warring States Period, resulting in increased trade. The new kings established an elaborate bureaucracy, using it to wage wars, build large temples, and perform public works projects. This new system rewarded talent over birthright; important positions were no longer occupied solely by nobility. The adoption of new iron tools revolutionized agriculture and led to a large population increase during this period. By 221 BCE, the state of Qin, which embraced reform more than other states, unified China, built the Great Wall, and set consistent standards of government. Although its draconian laws led to its overthrow in 206 BCE, the Qin institutions survived. During the Han Dynasty, China became a strong, unified, and centralized empire of self-sufficient farmers and artisans, though limited local autonomy remained. The Song Dynasty (960-1279 CE) brought additional economic reforms. Paper money, the compass, and other technological advances facilitated communication on a large scale and the widespread circulation of books. The state's control of the economy diminished, allowing private merchants to prosper and a large increase in investment and profit. Despite disruptions during the Mongol conquest of 1279, the population much increased under the Ming Dynasty and Qing Dynasty, but its GDP per capita remained static since then. In the later Qing period, China's economic development began to slow and Europe's rapid development since the Late Middle Ages and Renaissance enabled it to surpass China--an event known as the Great Divergence.

Another item exported to Europe was chinaware or porcelain (ciqi О•Кн; often called "earthenware" taoqi У©Кн), produced in the state-owned kilns in Jingdezhen МiъЇТЅ/Jiangxi, or in private porcelain producing cities like Lijiang з“Н~/Hunan, Zibo ?ФО/Shandong, or Dehua ъЇЙї/Fujian. Paper, hempen cloth, lacquerware, and metal objects also belonged to the early industrially produced commodities. Wuhu ХУМќ/Jiangsu was a center of steel production. "International" trade exists since we find states in human history, but China never had a system of import taxes, or customs convention. Trade and traffic with foreign countries originated already in the period of Warring States between China and the Inner Asian nomad tribes, later with the Korean kingdoms, with Japan, South East Asia, Tibet and India. The high export rates of tea, porcelain and other agricultural or industrial products to Europe were rewarded with a very positive balance of payments (if this modern term may be allowed to use) - Chinese merchants and the state were payed with silver coins made of silver from the Americas. To provide the whole country with good and items needed, an intense trade system was necessary since the Sui Dynasty, when the Great Imperial Canal was dug.

In China, the waterways had always had a much higher importance for trade and commerce than the land routes or the sea traffic along the coast. Until today, the canal system in the Yangtse area serves as the main transport medium. Since the days of Tang Dynasty, merchants and traders took over the responsibility to transport not only wares of private origin, but also commodities that were subject to state monopoly, like salt and liquor. Last but not least, we can see that from the Manchu conquest of whole China until the First Opium War, there were almost no military conflicts with foreign powers or inside the empire - a long period of peace.

While the first half of the 18th century was a time of prosperity, corruption and favoritism at the end of the century helped to create hopeless situations for peasants in many areas. The White Lotus Sect (Bailian Jiao ФТШ@Л≥) was revived and helped to launch peasant uprisings in territories where the mismanagement of local magnates and magistrates had neglected the maintenance of dikes and waterways and had lead to flood disasters. Other peasant uprisings followed a secret society named Triad Sect (Sanhe Hui ОOНЗШр). The suffering of peasantry in many areas was worsened by the demographic increase of population during the 18th century. The economical and technical standards of the 18th China were quite high, but they did not fit the needs and demands of an increasing population. Qing China did not make use of paper money but instead relied on copper and silver coins. When the import of silver decreased - or rather the export of silver increased - at the begin of 19th century, the small copper coin ("cash") suffered depreciation: a fatal situation for the lower classes of society. Corruption, favoritism, and nepotism within the Chinese officialdom has two sources.

The first can be seen in the exaggerated centralism of Qing administration. Governmental posts in the territorial administration were occupied by officials that came not from actual province, but the magistrates had to rely on the help of local secretaries and the local gentry and therewith had personal relations to these people. The second reason for the spoliation and nepotism mentality is the fact that - after passing the difficult state examinations and obtaining a post as local governor - the newly posted official had to reward his sponsors and his family as long as he was sitting on his post. Additionally, the daily flood of paperwork in a centralized bureaucracy lead to severe cautiousness and inflexibility of the officialdom. Paralyzed by administratorial instructions and controlled by censorate inspectors, local officials were unable to cope with new challenges in a changing environment.

The state itself run into financial crisis after decades of prosperity, and the requirements for financial stability within an unstable economy were to high at the begin of 19th century. While the small states of Europe could develop an industrial and capitalist economy, the agronomical background and the loss of monetary investment could not help China in her backwardness that became so obvious when the aggressive European merchants tried to enter the Chinese market.

Economy during the early Qing

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The Qing Dynasty, also Empire of the Great Qing or Great Qing, was the last imperial dynasty of China, ruling from 1644 to 1912 with a brief, abortive restoration in 1917. It was preceded by the Ming Dynasty and followed by the Republic of China.

The dynasty was founded by the Jurchen Aisin Gioro clan in contemporary Northeastern China. The Aisin Gioro leader,Nurhachi, who was originally a vassal of the Ming emperors, began unifying the Jurchen clans in the late sixteenth century. By 1635, Nurhachi's son Hong Taiji could claim they constituted a single and united Manchu people and began forcing the Ming out of Liaoning in southern Manchuria. In 1644, the Ming capital Beijing was sacked by a peasant revolt led by Li Zicheng, a former minor Ming official who became the leader of the peasant revolt, who then proclaimed the Shun dynasty. The last Ming ruler, theChongzhen Emperor, committed suicide when the city fell. When Li Zicheng moved against Ming general Wu Sangui, the latter made an alliance with the Manchus and opened the Shanhai Pass to the Manchurian army. Under Prince Dorgon, they seized control of Beijing and overthrew Li Zicheng's short-lived Shun Dynasty. Complete pacification of China was accomplished around 1683 under the Kangxi Emperor.

Over the course of its reign, the Qing became highly integrated with Chinese culture. The imperial examinations continued and Han civil servants administered the empire alongside Manchu ones. The Qing reached its height under the Qianlong Emperor in the eighteenth century, expanding beyond China's prior and later boundaries. Imperial corruption exemplified by the ministerHeshen and a series of rebellions, natural disasters, and defeats in wars against European powers gravely weakened the Qing during the nineteenth century. "Unequal Treaties" provided for extraterritoriality and removed large areas of treaty ports from Chinese sovereignty. The government attempts to modernize during the Self-Strengthening Movement in the late 19th century yielded few lasting results. Losing the First Sino-Japanese War of 1894-1895 was a watershed for the Qing government and the result demonstrated that reform had modernized Japan significantly since the Meiji Restoration in 1867, especially as compared with the Self-Strengthening Movement in China.

The 1911 Wuchang Uprising of the New Army ended with the overthrow of the Empress Dowager Longyu and the infant Puyi on February 12, 1912. Despite the declaration of the Republic of China, the generals would continue to fight amongst themselves for the next several decades during the Warlord Era. Puyi was briefly restored to power in Beijing by Zhang Xun in July 1917, and in Manchukuo by the Japanese between 1932 and 1945.

Both in honor of the earlier Jurchen Jin dynasty in the 12-13th century and his Aisin Gioro clan (Aisin being the Manchu for theChinese Ла (jоn, "gold")) Nurhachi originally named his state the Great Jin (lit "Gold") dynasty, afterwards called the Later Jin Dynasty by historians. His son Hong Taiji renamed the dynasty Great Qing (lit "Clarity") in 1636. The name "Qing" was selected in reaction to the name of the Ming Dynasty (ЦЊ) which consists of the characters for "sun" (Уъ) and "moon" (МО), both associated with the fire element. The character Qing (Рі) is composed of "water" (?) and "azure" (Р¬), both associated with the water element. This association would explain the Qing conquest through defeat of fire by water. The water imagery of the new name may also have had Buddhist overtones of perspicacity and enlightenment and connections with the BodhisattvaManjusri.

The state was known internationally as China, or the Chinese Empire and considered to comprise China proper or the Eighteen provinces, Chinese Tartary, Chinese Turkestan, and Tibet. It was also known in the romanization of the time as the Ta Tsing Empire from the Chinese for "Empire of the Great Qing" (СеРіТйНС, p Da Qоng Diguo).

II. State control of the economy

The Qing Dynasty was founded not by Han Chinese, who form the majority of the Chinese population, but by a semi-sedentary people known as the Jurchen, a Tungusic people who lived around the region now comprising the Chinese provinces of Jilin and Heilongjiang.What was to become the Manchu state was founded by Nurhachi, the chieftain of a minor Jurchen tribe - the Aisin Gioro - in Jianzhouin the early 17th century. Originally a vassal of the Ming emperors, Nurhachi embarked on an inter-tribal feud in 1582 that escalated into a campaign to unify the nearby tribes. By 1616, he had sufficiently consolidated Jianzhou so as to be able to proclaim himselfKhan of the Great Jin in reference to the previous Jurchen dynasty.

Two years later, Nurhachi announced the "Seven Grievances" and openly renounced the sovereignty of Ming overlordship in order to complete the unification of those Jurchen tribes still allied with the Ming emperor. After a series of successful battles, he relocated his capital from Hetu Ala to successively bigger captured Ming cities in Liaodong Province: first Liaoyang in 1621, then Shenyang(Mukden) in 1625.

Relocating his court from Jianzhou to Liaodong provided Nurhachi access to more resources; it also brought him in close contact with the Mongol domains on the plains of Mongolia. Although by this time the once-united Mongol nation had long since fragmented into individual and hostile tribes, these tribes still presented a serious security threat to the Ming borders. Nurhachi's policy towards the Mongols was to seek their friendship and cooperation against the Ming, securing his western border from a powerful potential enemy.

Furthermore, the Mongols proved a useful ally in the war, lending the Jurchens their expertise as cavalry archers. To cement this new alliance, Nurhachi initiated a policy of inter-marriages between the Jurchen and Mongol nobilities, while those who resisted were met with military action. This is a typical example of Nurhachi's initiatives that eventually became official Qing government policy. During most of the Qing Dynasty time, the Mongols gave military assistance to the Manchus.

Some of Nurhachi's other important contributions include ordering the creation of a written Manchu script based on the Mongolian so as to avoid the earlier Jurchen script which had been derived from Khitan and Chinese and the creation of the civil and military administrative system which eventually evolved into the Eight Banners, the defining element of Manchu identity and the foundation for transforming the loosely knitted Jurchen tribes into a nation.

Nurhachi's unbroken series of military successes came to an end in January 1626 when he was defeated by Yuan Chonghuan while laying siege to Ningyuan. He died a few months later and was succeeded by his eighth son, Hong Taiji, who emerged after a short political struggle amongst other potential contenders as the new Khan.

Although Hong Taiji was an experienced leader and the commander of two Banners at the time of his succession, his reign did not start well on the military front. The Jurchens suffered yet another defeat in 1627 at the hands of Yuan Chonghuan. As before, this defeat was, in part, due to Ming's newly acquired Portuguese cannons.

To redress the technological and numerical disparity, Hong Taiji in 1634 created his own artillery corps, the ujen chooha, Chinese from among his existing Han troops who cast their own cannons in the European design with the help of captured Chinese metallurgists. In 1635, the Manchus' Mongol allies were fully incorporated into a separate Banner hierarchy under direct Manchu command. Hong Taiji then proceeded in 1636 to invade Korea again.

This was followed by the creation of the first two Han Banners in 1637 (increasing to eight in 1642). Together these military reforms enabled Hong Taiji to resoundingly defeat Ming forces in aseries of battles from 1640 to 1642 for the territories of Songshan and Jingzhou. This final victory resulted in the surrender of many of the Ming Dynasty's most battle-hardened troops, the death of Yuan Chonghuan at the hands of the Chongzhen Emperor (who thought Yuan had betrayed him), and the complete and permanent withdrawal of the remaining Ming forces north of the Great Wall.

Meanwhile, Hong Taiji set up a rudimentary bureaucratic system based on the Ming model. He established six boards or executive level ministries in 1631 to oversee finance, personnel, rites, military, punishments, and public works. However, these administrative organs had very little role initially, and it was not until the eve of completing the conquest some ten years later that they filled out their government roles.

Hong Taiji's bureaucracy was staffed with many Han Chinese, including many newly surrendered Ming officials. The Manchus' continued dominance was ensured by an ethnic quota for top bureaucratic appointments. Hong Taiji's reign also saw a fundamental change of policy towards his Han Chinese subjects. Whereas under Nurhachi all captured Han Chinese were seen as potential fifth columnists for the Ming and treated as chattel - including those who eventually held important government posts - Hong Taiji instead incorporated them into the Jurchen "nation" as full (if not first-class) citizens, obligated to provide military service. By 1648, less than one-sixth of the bannermen were of Manchu ancestry.

This change of policy not only increased Hong Taiji's manpower and reduced his military dependence on banners not under his personal control, it also greatly encouraged other Han Chinese subjects of the Ming Dynasty to surrender and accept Jurchen rule when they were defeated militarily. Through these and other measures Hong Taiji was able to centralize power unto the office of the Khan, which in the long run prevented the Jurchen federation from fragmenting after his death.

One of the defining events of Hong Taiji's reign was the official adoption of the name "Manchu" for the united Jurchen people in November, 1635. The next year, when he is said to be presented with the imperial seal of the Yuan Dynasty after the defeat of the last Khagan of the Mongols, Hong Taiji renamed his state from "Great Jin" to "Great Qing" and elevated his position from Khan to Emperor, suggesting imperial ambitions beyond unifying the Manchu territories.

Before the establishment of the Qing Dynasty, there was a regime called 'Latter Jin' that had been set up by Nurhachu, leader of the Man Ethnic Minority. Actually, Man people were the offspring of the Nuzhen people who had always been living in Northeast China. After reunifying all the Nuzhen tribes, Nurhachu proclaimed himself emperor in 1616. Thus a new regime called Latter Jin was founded in Hetu Ala (in current Liaoning Province) during the reign of Emperor Shenzong of the Ming Dynasty (1368 - 1644).

In 1636, Huang Taiji, son of Nurhachu moved the capital to Shenyang (currently the capital city of Liaoning Province) and changed the regime title into 'Qing'. He thus established the Qing Dynasty. In 1644 when peasant's uprising leader Li Zicheng ended the Ming Dynasty and set up a new regime in Beijing, the Qing army seduced a general named Wu Sangui to rebel against Li Zicheng. With Wu's help, the Qing army successfully captured Beijing and rooted their regime there.

At the beginning, the Qing court carried out a series of policies to revive the social economy and alleviate the class contradiction. In politics, following the ruling pattern of the Ming Dynasty, the imperial rulers continued to strengthen the centralized system. Meanwhile, the Qing court resumed the 'Sheng' administrative system that originated in the Yuan Dynasty (1271 - 1368). Especially, in the frontiers like Tibet, Xinjiang, Mongol and Taiwan Island, the Qing court set out to enhance the power of the imperial ruling.

By the middle of the 18th century, the feudal economy of the Qing Dynasty reached a zenith, spanning the reign of Emperor Kangxi, Emperor Yongzheng and Emperor Qianlong. So that period was usually called 'the golden age of three emperors'. In that period, both culture and science were much more prosperous than any other periods. The notable book, The Imperial Collection of Four, was edited in that period. Also, a group of scholars and artists such as Cao Xueqin (writer of A Dream of Red Mansions), Wu Jingzi (writer of The Scholars) and Kong Shangren (writer of The Peach Blossom Fan) gradually appeared. In the field of science, the achievements in architecture were outstanding.

After the middle period, all kinds of social contradictions increasingly surfaced and the Qing Dynasty began to decline. Under the corrupt ruling of the later rulers, various rebellions and uprisings broke out. In 1840 when the Opium War broke out, the Qing court was faced with troubles at home and aggression from abroad. During that period, measures were adopted by imperial rulers and some radical peasants to bolster their power. The Westernization Movement, the Reform Movement of 1898 and the Taiping Rebellion were the most influential ones, but none of them had ever succeeded in saving the dying Qing Dynasty. Finally, the Revolution of 1911 led by Sun Yat-sen broke out and overthrew the Qing Dynasty, bringing two thousand years of Chinese feudal monarchy to an end.

Isolationist trade policy

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Free trade and peace go together; protectionism is the handmaiden of war. These were key teachings of the early classical economists, as well as the Austrians. Consistent libertarians have never doubted it. But recently the theory has come under fire from all sides and led to dangerous coalitions pushing for the worst of all worlds, autarky and military belligerence.

The lies usually begin with the word "isolationism." It was FDR's smear term for the mass movement trying to prevent the U.S. from intervening in another horrific European war. Isolationism meant the desire to keep the troops out of harm's way. But this position by no means precluded trading relations. Sweden, Portugal, and Switzerland, for example, spared themselves disaster by adopting the American framers' policy of military neutrality and trade with all sides.

Fast forward to the end of the war, when Harry Truman and his cronies had the bright idea of blowing billions in foreign aid. The "isolationists," said Truman, opposed it in favor of letting free markets rebuild Europe. Fast forward again, to George Bush and his Gulf War. The people who opposed risking American lives to preserve Saudi domination of oil markets were also denounced as isolationists. Also 'isolationist" were those people who, four years later, opposed the preferential, tax-funded, regulated trade cartel of Nafta. So far, then, it appears that holding an isolationist position is an unmitigated good: against war, against foreign aid, against preferential trade agreements, but for free trade. Should the term be worn as a badge of honor? Not quite yet, for the great China debate has hugely complicated matters. On one side, there are people who want to treat China as part of the community of nations, by encouraging its 15-year experiment in capitalist economic policies. This has resulted in a historic economic boom of double-digit annual growth, unprecedented freedom and prosperity for huge elements of the population, and a dramatic decline in government power. Within the lifetimes of every middle-aged person, the country has moved from mass starvation and terror to accommodating huge commercial centers that rival Houston and Montreal. The Chinese authorities can call it communism if they want to, but the system rising there is more Mises than Marx.

On the other side of the China debate is a motley coalition of activists - invariably called isolationists - who know and care nothing about economics, and, in fact, show disdain for it. This coalition includes old-time warmongers hoping to use China as the preferred enemy in a renewed Cold War. It includes labor unions who want to stiff-arm American consumers into not buying Chinese products. It includes the managers of protectionist industries who want to keep products out. It includes the munitions manufacturers who need another excuse for a government contract. And, of course, it includes clueless national socialists who oppose all forms of international trade. They delude themselves into viewing economic exchange as a form of warfare that compels retaliation. They use phrases like "China's aggressive trade and military policies" as if a boatload of party hats is the equivalent of a bomb. They attribute the very existence of trade to entities like the "China Lobby," as if there weren't millions of people here and there who benefit.

They go so far as to compare China to the old Soviet Union, as if our only option is a nuclear showdown, or, in the case of William Hawkins, adviser to Rep. Duncan Hunter of California, Hitler's Germany, as if the only option is world war. Every uptick in Chinese prosperity, far from being a cause for celebration is a disaster. Hawkins, whose salary is paid by the taxpayers, sees a security threat in the fact that "trade and investment is helping that country's infrastructure and industrial base." Precisely: that's what it is supposed to do, and that's why trade and free enterprise is a great thing. Why is it necessary to point this out?

What makes this menacing anti-China coalition unusual is the addition of certain elements of the religious right. They say the Chinese government violates human rights, suppresses religious liberty, and uses slave labor, and therefore "we" (meaning the U.S. government) ought to shut down its booming trade relations with the U.S.

At one time, these same people cared intensely about violations of religious liberty here at home. They had seen the Waco massacre, seen homeschoolers rounded up for educating their children, seen pastors dragged off to jail for refusing to register their church schools, and fought the Supreme Court on a host of issues where it has usurped individual, family, and local rights. They battled the real enemy: their own government, which has subsidized cultural breakdown and suppressed religious freedom at every turn. What's happened? Did they get bored with the fight that really matters? Certainly it's easier, and much more respectable within the beltway, to fight real and alleged infractions halfway around the globe than to face the awful reality of Leviathan here at home. But it's a grave error that can only lead to political and economic disaster. Are there no prisoners of conscience in U.S. jails that merit attention? Is it not slave labor that Americans are forced to work half the year to pay the tax bill before they can begin providing for their families? Are no religious rights being violated when a distant central government prevents a local school choir from singing carols at the school play? Is religious liberty secure when an unconstitutional national police force torches and murders an entire religious community, and then jails the few survivors for 40 years?

The tragedy is this: by focusing on distant crimes we cannot prevent, while ignoring those at home we can stop, we play right into the hands of big government. Punishing China with embargoes and trade restrictions does nothing to improve life in China, even while it strengthens the hand of government here at home. We put the real enemy of liberty in charge of telling American producers and consumers what they can and cannot buy from abroad, and at what prices. Further, the anti-China crowd is proposing to punish the Chinese people for the infractions of the Chinese government. The stakes are huge. U.S. and Chinese corporations are in the process of developing joint ventures to open up new and hugely profitable shipping lanes from California to the northern regions of China that have not yet benefitted from the economic boom. If a trade war breaks out, as the actual isolationists would like, all of this would be lost, and millions of people would be condemned to continued poverty. How can the anti-China protectionists live with this on their consciences?

It's fashionable these days to disparage people's desire for consumer goods obtained through international trade. American consumers who don't want to pay higher prices or join the trade war are said to be greedy and materialistic, putting Tickle-Me-Elmo dolls ahead of human rights. Similarly, we are encouraged to curl our lips at the idea that the Chinese people want to gain access to fast-food hamburgers - which we take for granted but which would be a dream-come-true for people who have lived under the communist yoke for so long. If we believe in liberty, we must understand that economic liberty is the most important kind. It is what touches our lives in the fullest possible way. What is the alleged right to vote compared with the real right to start a business, draw wages according to our productivity, keep the fruits of our labor, feed our family, save for the future, create a civilization? These are all components of capitalism, the only system truly compatible with the first and most important of human rights: the right to own and control what is yours.

The old classical liberals linked trade and peace because people with a commercial interest in good relations are likely to urge their own governments not to pursue the path of destruction and barriers. It's true in the Chinese case too. Disparage international business if you want, but as a lobbying force, we have it to thank for dousing the flames of war that labor unions, domestic bomb makers, and national socialists keep trying to fan.

It's a small step from advocating blockades with a country to urging full-scale military attack. Mr. Hawkins warns that the U.S. needs to "hobble China." How? By using "America's current advantage in economic and military strength to fortify its preeminence in Asia." U.S. "preeminence in Asia"? Can we imagine Washington or Jefferson talking that way? Why don't we just set up a world government and run the entire planet while we're at it? If that's what the U.S. has in mind, it's a recipe for global tyranny. It would bankrupt this country. It would make the U.S. Constitution - already ignored - a permanent dead letter. It would keep Leviathan's grip fastened on the American people until the end of time. It would lead to perpetual war in the name of perpetual human rights.

China bashing and protectionist thinking is not kid's play. Because the U.S. government uses it to its own advantage, it represents a real threat to our liberty and property. We've lived through a hellish century of protectionism, war, socialism, and mass destruction, with governments holding the world's civilian population as hostages in their evil political games. Our choice today is what it has always been: peace and free trade with all, or trade wars, cold wars, and real wars that only government can win. After the Zheng He voyages in the 15th century, the foreign policy of the Ming Dynasty in China became increasingly isolationist. Hongwu Emperor was the first to propose the policy to ban all maritime shipping in 1371. The Qing Dynasty that came after the Ming often continued the latter dynasty's isolationist policies. Wokou or Japanese pirates were one of the key primary concerns, although the maritime ban was not without some control.

At the end of China's bloody civil war, in the early and mid 1900s, the country quickly closed off its borders to many outside countries and only maintained diplomatic ties with the Soviet Union. For a period of time the Chinese attempted to become self-reliant, but found that in doing so the country could not break even economically, especially when attempting to maintain a communist vision when it came to economics. In the 1970s the People Republic of China began large radical economic reforms, which forced the country from a zero competition nation to one of the most capitalistic in the world. In doing so it quickly began to open its borders to the trade of various other countries thus adding itself to a global trade economy. While the government still regulates many of the country's cultural interactions with others, it is very open to the concept of an open market and competition with other countries, allowing the flow of technological innovations to flow in and out of its borders freely. Mao in 1949 set China in an isolationist, and communist country, along with their Soviet benefactors.

China's last dynasty. The Manchu rulers immediately suppressed the peasant rebellions that had rocked the Ming - but it took them 20 years to consolidate their power. The early Qing period saw an increase in agricultural production, the construction of massive flood control and other public works projects, and a flourishing of the arts and scholarship. Much of the Qing period was one of wealth and expansion. China expanded to its greatest size ever, incorporating Inner and Outer Mongolia and Turkestan. Qing emperor QianLong(1736-1796), regarded as one of China's greatest rulers, presided over a period of wealth and expansion during which China reached the apex of its power. However, China's prosperity was not to last. Increased population, food and land shortages, official corruption and expensive military campaigns threatened Qing prosperity and authority. Increased contact with the militarily superior west in the later half of the 19th century further hastened the fall of the Qing in 1911.

Western nations had been trading with China for centuries, despite the closed-door policy. Under the Qing, trade was restricted to GuangZhou (Canton). This system of trade, known as the Canton System, was regulated to the extreme. Despite the regulations, western nations, Britain in particular, flocked to China.

By 1760, Britain's East India Company had joined the traders in GuangZhou in search of tea, silks and porcelain. Britain's thirst for tea created a balance of trade vastly favoring China. China was a willing exporter, but disdained western goods. Silver flowed into China and remained there. In 1793, Britain tried in vain to establish a trade treaty with China. However, her overtures to the Qing court were rebuffed. Britain's traders took the matter into their own hands and began a clandestine trade in opium to counteract the trade imbalance.

Opium, by no means unknown in China, had previously been a drug only for the very wealthy. Cheap opium, imported from India, had, by 1820, created a vast number of addicts. As the numbers rose, China's trade surplus became a deficit.

In 1836, the emperor strictly prohibited trade in Opium. Dealers and users were to be harshly punished. However, his order went unheeded. In 1840, in another attempt to stem the trade, chests of opium were seized and burned in Canton (GuangZhou). This action served as the impetus for Britain to start the First Opium War, in which China's markets were forcibly opened. The term Gunboat Diplomacy stems from the gunboats used by the British.

After 2 years of fighting, the Treaty of NanJing (1842) ended the First Opium War.China was no longer allowed to isolate herself from trade and diplomacy with the west. The treaty stipulated five Treaty Ports to be opened to trade, provided for the 99 year lease of Hong Kong to the British crown, and ensured the humiliating practice of extraterritoriality.

Extraterritoriality stipulated that foreigners in China were to be subject only to the laws of their homeland, not to the laws of China. The unfair treaty system remained in force until 1943. The Qing's humiliating defeat at the hands of foreigners in the Opium War heralded the collapse of the dynasty. Its defeat, compounded by floods, famine and government corruption irrevocably weakened its mandate to rule. By 1850, China was in chaos, engulfed by internal rebellions. A Chinese Christian evangelist, Hong XiuQuan, led the notorious TaiPing Rebellion, the largest of the rebellions. He preached Christianity, radical economic and political reforms, and anti-foreign rhetoric. His call to arms in 1850 was taken-up by 20,000 chinese angry at Qing rule. The TaiPing Army swept though the YangZi basin swelling in numbers along the way. The rebellion was only suppressed with the help of the European powers, who took action for fear of a China controlled by Hong's anti-foreign government.

Following the suppression of the TaiPing Rebellion, the Qing government made a half-hearted but futile attempt to regain control and institute reform. Ci Xi, the Empress Dowager and dominant political figure in the Qing court, exemplified the court's lack of commitment to reform. The Summer Palace, including the beautiful, though useless, marble boat, was built at this time under Ci Xi's orders using misappropriated navy funds.

In the waning years of the 19th century China was plunged deeper into chaos. The Qing dynasty was further weakened, and its military ineptitude laid bare, when China suffered another humiliating defeat in the Sino-Japanese war. As demands from foreigners for trading, economic and political concessions mounted, so too did anti-foreign sentiment in China. Peasants began to form secret anti-foreign societies.

The Boxers were one such society. They adhered to a mystical faith that included spells and rituals, which, they claimed, made them invincible to the foreigners' bullets. The Boxer's anti-foreign stance won them the semi-official support of the Qing court which gave its blessing to the Boxer Uprising (1900) in which hundreds of foreigners were killed.

An international army defeated the Boxers and Ci Xi fled Beijing. Though the dynasty held on for another 10 years, the Boxer uprising signals the effective end of all but nominal Qing control. After the Boxer rebellion, the Qing government made one last ditch attempt to reform and regain its mandate to rule. However, it had fallen from grace. As power devolved to provincial rulers, rebellion and uprisings became the norm. In 1911, a popular uprising, led by the Tong Meng Hui (that later became the KuoMinTang), Sun YatSen's revolutionary society, finally toppled the Qing, thus ending 2,000 years of imperial rule.

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Opium Wars

At the end of the 1800s China's four million square miles held 450 million people, up from 200 million a century earlier. The ruling dynasty was the Ching, established by Manchus from Manchuria, who in 1644 had superseded the Ming. These descendants of the Tatars appreciated Chinese civilization and adopted a conciliatory attitude toward their subjects. They refused, however, to allow intermarriage with the Chinese, for they realized that only their blood difference kept them from being assimilated and conquered. By and large, however, the Manchus gradually became Chinese in their attitudes and habits. The Manchu emperors were remarkably successful. The reign of Chien-lung (1736-1795) was a time of great expansion. The Manchus gained Turkestan, Burma, and Tibet. By the end of the eighteenth century Manchu power extended even into Nepal, and the territory under the Ching control was as extensive as under any previous dynasty.

The foreigners were especially irritated by the high customs duties the Chinese forced them to pay and by the attempts of Chinese authorities to stop the growing import trade in opium. The drug had long been used to stop diarrhea, but in the seventeenth and eighteenth century people in all classes began to use it recreationally. Most opium came from Turkey or India, and in 1800 its import was forbidden by the imperial government. Despite this restriction, the opium trade continued to flourish. Privately owned vessels of many countries, including the United States, made huge profits from the growing number of Chinese addicts. The government in Peking noted that the foreigners seemed intent on dragging down the Chinese through the encouragement of opium addiction.

In the meantime, the empire faced other problems. The army became corrupt and the tax farmers defrauded the people. The central bureaucracy declined in efficiency, and the generally weak emperors were unable to meet the challenges of the time. The balance of trade turned against the Chinese in the 1830s, and the British decided to force the issue of increased trade rights. The point of conflict was the opium trade. By the late 1830s more than 30,000 chests, each of which held about 150 pounds of the extract, were being brought in annually by the various foreign powers. Some authorities assert that the trade in opium alone reversed China's formerly favorable balance of trade. In the spring of 1839 Chinese authorities at Canton confiscated and burned the opium. In response, the British occupied positions around Canton.

In the war that followed, the Chinese could not match the technological and tactical superiority of the British forces. In 1842 China agreed to the provisions of the Treaty of Nanking. Hong Kong was ceded to Great Britain, and other ports, including Canton, were opened to British residence and trade. It would be a mistake to view the conflict between the two countries simply as a matter of drug control; it was instead the acting out of deep cultural conflicts between east and west.

The French and Americans approached the Chinese after the Nanking Treaty's provisions became known, and in 1844 gained the same trading rights as the British. The advantages granted the three nations by the Chinese set a precedent that would dominate China's relations with the world for the next century. The "most favored nation" treatment came to be extended so far that China's right to rule in its own territory was limited. This began the period referred to by the Chinese as the time of unequal treaties - a time of unprecedented degradation for China. The humiliation the Central Kingdom suffered is still remembered and strongly affects important aspects of its foreign policy. Meanwhile, the opium trade continued to thrive. The British and French again defeated China in a second opium war in 1856. By the terms of the Treaty of Tientsin (1858) the Chinese opened new ports to trading and allowed foreigners with passports to travel in the interior. Christians gained the right to spread their faith and hold property, thus opening up another means of western penetration. The United States and Russia gained the same privileges in separate treaties.

British merchants were frustrated by Chinese trade laws and refused to cooperate with Chinese legal officials because of their routine use of torture. Upon his arrival in Canton in March, 1839, the Emperor's special emissary, Lin Ze-xu, took swift action against the foreign merchants and their Chinese accomplices, making some 1,600 arrests and confiscating 11,000 pounds of opium. Despite attempts by the British superintendent of trade, Charles Elliot, to negotiate a compromise, in June Lin ordered the seizure another 20,00 crates of opium from foreign-controlled factories, holding all foreign merchants under arrest until they surrendered nine million dollars worth of opium, which he then had burned publicly. Finally, he ordered the port of Canton closed to all foreign merchants. Elliot in turn ordered a blockade of the Pearl River. In an ensuing naval battle, described as a victory by Chinese propagandists, in November 1839 the Royal Navy sank a number of Chinese vessels near Guangzhou. By January 1841, the British had captured the Bogue forts at the Pearl's mouth and controlled the high ground above the port of Canton. Subsequently, British forces scored victories on land at Ningbo and Chinhai, crushing the ill-equipped and poorly trained imperial forces with ease. Viewed as too moderate back at home, in August 1841 Elliot was replaced by Sir Henry Pottinger to launch a major offensive against Ningbo and Tiajin. By the end of June British forces occupied Zhenjiang and controlled the vast rice-growing lands of southern China.


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