China

Industrialization for “self-strengthening”

Stimulated by the military training and techniques exhibited during the Westerners’ cooperation against the Taiping and supported by Prince Gong in Beijing, the Self-Strengthening Movement was launched by the anti-Taiping generals Zeng Guofan, Li Hongzhang, and Zuo Zongtang, who sought to consolidate the Qing power by introducing Western technology. The ideological champion of the movement was Feng Guifen, who urged China to “use the barbarians’ superior techniques to control the barbarians” and proposed to give the gentry stronger leadership than before in local administration.

In the first period of modern industrial development (1861–72), effort was focused on manufacturing firearms and machines, the most important enterprises being the Kiangnan (Jiangnan) Arsenal in Shanghai, the Tianjin Machine Factory, and the Fuzhou Navy Yard; there were many other smaller ones. However, the output was disappointing—the shipyard at Fuzhou, for example, built 15 vessels during the half decade after 1869 as scheduled, but thereafter it declined and was destroyed in 1884 during the Sino-French War—and the weapons industry was significant not so much for its direct military purpose as for the introduction of Western knowledge and techniques through the many educational facilities that were attached to each installation.

In the second period (1872–94), weight shifted from the weapons industry to a wider field of manufacture, and the operation shifted from direct government management to a government-supervised and merchant-managed method. Leading among the several enterprises of the second period were the China Merchants’ Steam Navigation Company and the Kaiping coal mines. These enterprises were sponsored by high provincial officials—the central figure was Li Hongzhang—but their management was left to joint operation by shareholders’ representatives and the lower officials appointed by the sponsors.

Management, however, was beset with bureaucratic malpractices. The seat of decision making and responsibility was obscure, business was spoiled by nepotism and corruption, and the sponsors tended to use the enterprises as a basis for their regional power. The central government not only was unable to supply capital but also looked for every opportunity to exploit these enterprises as it had exploited the monopolistic salt business on which those companies were modeled. Under such circumstances, the enterprises inevitably slid into depression after some initial years of apparent success.

Compounding the problems were the compradors (Chinese agents employed by foreign firms in China) who, acting as a link between Chinese commerce and the foreign firms in the treaty ports, accumulated vast wealth from the new enterprises. Though active in supplying capital and managerial personnel to the enterprises, the compradors themselves lacked technical training and knowledge and often indulged in speculation and embezzlement. Each comprador belonged to an exclusive community by strong family or regional ties that focused his concerns on his community rather than on national interests.

These shortcomings were deeply rooted in the late Qing social conditions and more than offset efforts to construct and maintain the new enterprises. Thus, Chinese society as a whole did not change structurally before 1911.