Destructive Impacts of Colonialism on China’s slow growth of output per person between the 1840s and the 1940s

destructive-impacts-of-colonialismThis essay critically analyses the level of destructive impact of colonialism on China’s growth output between the 1840s and the 1940s. The essay contains the contrast of opposite arguments regarding the topic and supports the argument confirming destructive impact of colonialism on China’s growth output between the 1840s and the 1940s by providing relevant and valid justifications.

A study of economic history can provide valuable knowledge to economic theorists and practitioners in terms of dealing with economic challenges of present and the future. An in-depth analysis of factors causing the level of economic growth to slow down in particular is necessary so that these factors can be dealt with to fuel economic prosperity in any given region.

Colonialism can be defined as “the control or governing influence of a nation over a dependent country, territory, or people” (Colonialism, online, 2016). While forming new colonies may prove to be a profitable strategy for powerful countries in many levels, economies that become victim to colonialism experience a set of substantial economic and social setbacks such as loss of sovereignty in terms of using economic resources, and negative impact upon cultural identity.

The essay starts with assessing the level of China’s economic growth between the 1840s and the 1940s providing evidences why it was slow for this specific period. This is followed by discussions of colonialism and its negative impacts on the level of China’s economic growth between the 1840s and the 1940s. In order to adhere to the specified word limit for this essay political implications of colonialism are not addressed in this essay, and the main focus have been made on effects of colonialism on national economics using the case study of China.

Moreover, an alterative viewpoint on the issue is also explored in this essay by assessing the impact of alternative factors that caused slow growth of output per person between the 1840s and the 1940s in China. The essay is concluded by refutation of counter-argument, and explaining why destructive impact of colonialism is the main factor that caused slow economic growth in China between the 1840s and the 1940s.

The essay mainly concentrates on the economic impact of colonialism and does not provide discussions of political aspects of the issue in great lengths. This is because the inclusion of discussions about the geopolitical environment within the scope of this essay would increase its size to a significant extent, compromising its focus to answer the question being asked.

Level of China’s economic growth between the 1840s and the 1940s

The period between the 1840s and the 1940s has been marked with a deep stagnation for the Chinese economy (Haiyun, 2010, online). The stagnation has related to a wide range of spheres and industries such as agriculture, manufacturing, and the level of exports.

There are abundant statistical evidences form reliable sources that signal about severe economic stagnation in China for period between the 1840s and the 1940s. For example, the level of economic growth in China from 1860 to 1949 has been calculated as less than 1 per cent, and this period has even contained a number of years in which the economy declined (Thomas, 2006).

Moreover, it has been noted that “between the 1840s and 1940s, China’s economy collapsed. Per capita GDP in 1950 was less than three-quarters of the 1820 level. In 1950, China’s GDP was less than a twelfth of that in Western Europe and the Western Offshoots” (Maddison, 2006, p.119)

For the period between 1900 and 1949 only 20 per cent of government budget was available to be spent on government expenses and initiatives aimed at economic development, at the same time when 40 per cent had to be spent for loan repayments, and the remaining 40 per cent accounted for military expenses (Chai, 2011)

The primary reasons for the deep stagnation in the economy of China during the period between the 1840s and the 1940s include, but not limited to a set of disastrous rebellions, the major one occurring in Taiping, series of wars with Western powers such as Britain and France, several occasions of Japanese military invasions, and negative implications of civil war between Kuomingtang and Communists.

Due to the abundance of economic and social misfortunes prevalent during the period between the 1840s and the 1940s (China Daily, 2010, online), this specific period in the history of China is sometimes referred to as “the century of humiliation and broken treaties” (Parker, 2001, online).

Colonialism and its negative impacts on the level of China’s economic growth between the 1840s and the 1940s

Colonialism implies one country gaining control over another country in terms of exploiting its resources, and influencing its governance. Generally, the negative impacts of colonialism include loss of sovereignty in terms of using economic resources, and negative impact upon cultural identity.

It is important to note that it is not compulsory for any country to invade another country in physical terms with the use of military in order to form a colony; colonies can be formed without a formal declaration of war through exploiting the resources, and influencing the governance of other states through intimidation, bribery and deception (Nolan, 2008).

Colonialism activities engaged by western countries is blamed for forcing China’s Qing dynasty to sign a range of ‘unequal treaties’ depriving China of its freedom to a certain extent with negative implications on economic growth (Thomas, 2006). Most noteworthy ‘unequal treaties’ were signed in 1842 and 1860 with Great Britain to make China a semi-sovereign country in terms of benefiting from international trade in a full extent.

The conditions of ‘treaties’ were highly unfavourable for China from economic viewpoint in a way that they legalised the sale of imported opium in China and gave freedom to foreign businesses operating in China from paying taxes and adherence to most of the legal requirements.

The sale of opium grown in India, a British colony by British East India Company has generated millions of opium addicts in China with highly negative social and economic impacts for the country. Moreover, negative implications of opium addiction amongst Chinese population on the level of economic growth were evident through loss of human resource capabilities and a high amount of healthcare expenses that otherwise could have contributed t o the standard of life of population.

Attempts by Chinese government to stop the trade had caused the first ‘Opium War’ in China in 1939, due to the fact that opium trade had proved to be highly profitable for Britain in terms of buying silk and tea from China, and taxes paid by opium manufacturers in India had amounted to 15 per cent of income generated by Britain in India (Richardson, 1999).

In other words, continuing to facilitate the sale of opium in China was a matter of strategic importance for Britain from an economic viewpoint and accordingly, this objective was decided to be achieved at all costs by British government, even at costs of waging a war against China.

Furthermore, according to a ‘treaty’ imposed by the Great Britain the rate of foreign trade tariffs for goods imported to China was set as low as 5 per cent to give tremendous advantages to foreign businesses at the expense of the local economy (Thomas, 2006). This has resulted in a huge amount of lost revenues from imported goods, and these revenues could have been invested in national economic development.

To further complicate the issue, ‘most-favoured nation’ clause had been introduced to a treaty, according to which it was necessary to China to obtain unanimous consent “from all the foreign imperialist powers in order to recover any sovereign right lost in treaties” (Thomas, 2006, p.5). In other words, western powers have made it extremely difficult for China to re-gain its full sovereignty and gaining control of its national economy, with the aim of prolonging the practice of exploiting Chinese economy.

Moreover, ‘unequal treaties’ have made foreign businesses operating in China immune from local jurisdictions, and this situation has opened the way for foreign businesses to exploit the local market in illegal ways. Also, ‘unequal treaties’ were developed in a way that almost all disputes between the local parties and foreign businesses in China were to be sorted to please the latter.

This practice has continued until 1949, when the government of China has been finally able to negotiate the shift of ‘unequal treaties’ partially in exchange of their further participation in war against Japan.

The payment of opium war indemnities amounting to large sums made compulsory for China within the period between 1842 and 1900, and paying large indemnity to Japan in 1896 with highly negative consequences for the Chinese economy can also be considered as destructive impact of colonialism.

China already had to bear significant amount of financial losses due to the lass of wars, and the compulsory payment of war indemnities created extra economic challenges for the country the impact of which lasted for several decades.

According to conditions set by ‘treaties’ China was not in the position of increasing the rate of tariffs on foreign goods, and thus the government was made to find foreign loans in order to compensate a high level of international trade deficit. For example, the amount of payments made by Qing China to foreign creditors for the period between 1890 and 1912 had amounted to more than 480 taels (Feuerwerker, 1995).

The amount of foreign loans taken by Chinese government rapidly spiralled because additional loans were taken at more expensive costs in order to pay for the previous ones. Moreover, starting from the beginning of the 20th century obtaining economic concessions has been adopted as one of the primary requirements by international lenders to provide funds to Chinese government, and consequently this has resulted in a loss of control for China over a set of strategic industries such as railroads and other important infrastructure (Kirby, 2006)

There are also arguments that Western countries have systematically supported opposition to the Qing government in various ways in order to discredit the legitimacy of the government, and thus preventing China from becoming a strong country (Nolan, 1993).

Convincing argument illustrating destructive impact of colonialism on China’s economic development can be proposed by referring to the short period of about 5 years known as ‘golden age’ in industrialisation of China (Chai, 2011). Specifically, during World War I the majority of European superpowers were engaged in war against one other resulting in pressure and control of China to be loosened. As the majority of scholars on China note (Nolan, 1993, Maddison, 2006, Evans, 2010), the same period is associated with higher level of economic development in China with positive implications o the level of its citizens.

Counter-argument: alternative factors that caused slow economic growth in China between the 1840s and the 1940s 

There is an alternative viewpoint according to which slow economic growth in China between the 1840s and the 1940s are caused by set of alternative factors than colonialism. Specifically, lack of industrialisation during the 19th century has been specified as one of the main factors obstructing economic growth in China (Howe et al., 2003).

A wide range of reasons can be provided for lack of industrialisation for the same period of time that include the negative impact of culture and traditions, increased level of family orientation, ineffectiveness of Chinese government, and a high level of corruption. In-depth discussion of each of these factors is provided further below.

Culture and traditions in China can be pointed to as additional set of factors that have negatively impacted the level of economic growth between the 1840s and the 1940s. One specific factor negatively impacting economic growth has been determined as a high level of universalism in Chinese society. It can be clarified that universalism means “in general the priority to general rules applying to all persons, and therefore the rejection of particular preferences in most spheres” (Wellerstein, 2004, p.38).

Increased level of family orientation within business entities in China is an alternative significant factor that might have contributed to economic stagnation within country for the period between the 1840s and the 1940s. According to supporters of counter-argument (Cai, 2010) a high level of family orientation within business entities in China has declined starting from the second part of the 20th century fuelling economic growth due to the impact of intensifying forces of globalisation.

Moreover, ineffectiveness of Chinese government may also have played a negative role in the development of the economy for the same period of time. Specifically, Chinese government in several generations can be blamed for lack of initiatives to improve the state of economy and overall incompetence in running the state.

There are arguments that even the most prominent leaders of China such as its first and second presidents Dr. Sun Yatsen and Jiang Kaishek, and Chairman of China Mao Zedong have always exaggerated the role of colonialism imposed by foreign powers for the deep economic problems of the country (Roberts, 2011) at the same time failing to utilise opportunities available to them.

Such opportunities can be specified as adopting innovative approach in dealing with economic issues, borrowing best practices from Western countries in terms of running the economy, fighting corruption within the country, and collaborating with Western powers to increase the levels of government revenues.

A high level of corruption at various levels in China has been specified as another major reason why the country has faced severe economic stagnation for the period between the 1840s and the 1940s (Chow, 2004) Corruption, along with ineffectiveness is blamed for disastrous use of foreign loans that have further deepened economic problems of China.

Arguably, a high level of corruption within various government ranks can be specified as the primary reason for the poor economic development in China for the period between the 1840s and the 1940s. It worth to be noted that no evidences of Chinese government fighting corruption at the same period of time has been found during the research process for completing this essay.

Interestingly, the prevalence of Confucian ideology in China has been shown as another reason for economic difficulties experienced by the country for the period between the 1840s and the 1940s (Cowan, 2006). It has been noted that Confucian perception of China is self-sufficient and superior, and thus this ideology has proved to be an obstacle in the way of learning best practices in economy and management from Western countries.

Furthermore, similar to the point above, opposing economic modernisation can be highlighted as a separate reason that halted economic development in China between the 1840s and the 1940s. It has been argued that modernisation has been avoided partially because of dislike of western principles and western culture among Chinese officials, as well as, citizens, and accordingly, being perceived as western way of doing business, the value of innovation and modernisation has been long underestimated (Subramanian, 2011).

Moreover, there are arguments that although China was negatively impacted by colonialism, nevertheless it had a chance of achieving economic prosperity to a certain extent, the chance that was never used. In justification of this point it has been stressed that “the Japanese experience shows that even harsh colonialism is quite compatible with rapid development of the productive forces” (Nolan, 1993, p.30).

There is also a viewpoint shared by some scholars that contrary to the popular opinion Western countries were interested in China to become a strong country with a developed infrastructure. The supporters of this viewpoint argue that “Western powers were desperately looking for a strong national government that could provide a stable environment for their business activities” (Nolan, 1993, p.39).

According to this stand, a greater level of cooperation between the government of China and Western powers initiated by Chinese government at any point within the period between the 1840s and the 1940s could have resulted in favourable economic outcome for China.

Refutation of counter-argument: why destructive impact of colonialism is the main factor that caused slow economic growth in China between the 1840s and the 1940s

The counter argument provided above fails to eliminate the destructive role of colonialism in various levels. First of all, parties dismissing the role of colonialism specify the lack of industrialisation during the 19th century as the main factor obstructing economic growth in China. At the same time, these parties fail to acknowledge that the lack of industrialisation in China has been a direct result of colonialism by western countries.

In other words, Western superpowers at a time like Britain and France have deliberately initiated certain measures such as imposing ‘unequal treaties’ to gain unfair advantage in bilateral trade, and enforcement of these ‘treaties’ was one of the main obstructions on the way of large scale industrialisation in China.

The argument blaming Confucian ideology for economic stagnation in China between the 1840s and the 1940s can be subjected to objective criticism as well. On the contrary, the positive impact of Confucian ideology on the level of economic growth of China has been officially acknowledged by Chinese government and other parties and introduction of a new organisation – International Society of Confucianism with Mr. Lee Kuan Yew, a former Prime Minister of Singapore elected as president serves to illustrate this point (Zurndorfer, 2004).

To be more specific, a range of advantages of Confucianism to business practices and economy at large such as respecting natural environment, valuing education, and training and development and cultivating corporate vision is being acknowledged by growing numbers of economists and business executives along the globe (Subramanian, 2011). Accordingly, it is inappropriate to blame Confucianism for economic stagnation in China between the 1840s and the 1940s.

Moreover, it worth to be mentioned that the roots of Confucianism date back to the sixth century B.C. (Roberts, 2011), and since then there were many periods of economic prosperity in the history of China. From this perspective, supporters of counter argument to the destructive impact of colonialism find it difficult to offer logical explanation for why Confucianism did not have negative impact on economy during other periods of history of China. Rather, it is not Confucianism, but negative implications of colonialism were the major factor withholding China from embracing rapid economic development for more than a century.

Supporters of counter argument to the destructive impact of colonialism to the level of economic growth in China between the 1840s and the 1940s consider Chinese culture and traditions to be one of the main factors negatively impacting economic growth. Similarly, a high level of family orientation within business entities in China has been shown in counter argument as the reason for economic stagnation.

While these arguments might be valid to a certain extent, nevertheless they can not be highlighted as one of the major causes of economic stagnation in a separate manner from other causes.

A high level of corruption at various levels within Chinese government system has been specified as another major reason for the history of economic stagnation for the period between the 1840s and the 1940s. This point represents a justified argument because corruption within any government system can have highly negative implications in terms of taking decisions in the best interests of the state.

The negative impacts of corruption can be much greater in China compared to a range of other countries because of the specifications of Chinese culture that is associated with paternalistic or even autocratic management style, high level of obedience to superiors in age and position, and strong bond in family relations (Cowan, 2006).

However, it has to be acknowledged that the practice of colonisation by major Western countries has proved to be a major reason contributing to corruption in China for the whole period between the 1840s and the 1940s. Specifically, the practice of bribing government officials and major merchants has been established in an institutional manner in relation to the distribution and sale of opium within the period between the sale of opium was banned by Chinese government and a set of ‘Opium Wars’ was won by Britain.

From this perspective, the impact of corruption on economic stagnation in China for the period between the 1840s and the 1940s has to be analysed taking into account the negative impacts of colonisation in order to represent the issue objectively.

The argument that “colonialism is quite compatible with rapid development of the productive forces” (Nolan, 1993, p.30) pointing to Japanese experience does not withstand criticism either. This is because unlike Japan, China was traditionally rich in products such as tea, silk and ceramics, highly valued in western markets and western countries, especially Britain have successfully sought opportunities to gain unfair advantage in trading with China with highly negative implications for the economy of China.

Conclusions

The state of economy in China for the period between the 1840s and the 1940s can be specified as a deep stagnation. Statistical evidences about the miniature level of economic growth and the level of GDP per capita within the same period provided in this essay service to prove this point.

China was among a few countries along with Iran, Turkey, Japan, and Afghanistan that were not official colonies of western countries; however, in reality the country was semi-sovereign for the period between the 1840s and the 1940s due to the enforcement of a set of military backed ‘unequal treaties’ by western countries.

Partial colonisation of China facilitated through a series of ‘unequal treaties’ initiated by the UK and other Western countries has caused a deep stagnation and slowed the growth rate of economy. Moreover, colonialism has negatively impacted on the level of utilisation of tools used by other countries to achieve economic growth.

Such tools include but not limited to imposing import tariffs in order to safeguard local producers and generate revenues for the government, using legislation to safeguard population from opium addition, and using taxation to regulate the business. Importantly, ‘treaties’ deprived Chinese government to regulate the activities of foreign businesses operating in China with negative implications on the local economy in many levels.

However, there is an alternative viewpoint that credits slow economic growth in China between the 1840s and the 1940s to a set of alternative reasons, dismissing the argument of destructive impacts of colonialism. These alternative reasons have been proposed as the lack of industrialisation for the same period of time, negative impact of culture and traditions, increased level of family orientation, ineffectiveness of Chinese government, and a high level of corruption.

The essay contains refutation of counter-arguments through logical discussions and provision of evidences in favour of initial argument, i.e. the essay explains destructive impact of colonialism to the slow growth of output per person between the 1840s and the 1940s in a detailed manner.

To summarise this discussion it can be stated that the destructive impact of colonialism is the main reason for the slow growth of output per person between the 1840s and the 1940s in China. This impact has been facilitated through a series of ‘unequal treaties’ initiated by the UK and other Western countries and three occasions of Japanese military invasions within the same period.

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