8 - Public Finance

Summary

At the turn of the nineteenth century, the Qing dynasty entered a phase of social and economic decline. By 1850, mounting crises had exploded in a devastating series of rebellions (best known for the Taiping Rebellion, 1850–1864). Until 1880, up to a quarter of the population had perished, although the numbers are debated. The civil wars revealed the bankruptcy of the dogma of fixed tax quotas that had governed China’s fiscal thought since the Ming dynasty (see the chapter by von Glahn and Lamouroux in Volume 1). New commercial taxes, most prominently foreign customs and lijin 釐金 (literally “one-thousandth”) trade tariffs, soon exceeded agricultural taxes and increased state revenue. Fiscal recovery was short-lived, however, as the double defeat in the First Sino-Japanese War (1894–1895) and the Boxer Rebellion (1900–1901) once again threw Qing finances into turmoil. Servicing the war loans and indemnities while simultaneously promoting costly “New Policy” (xinzheng 新政) reforms (1901–1911), the imperial government gradually lost control of the provinces and was unable to check the nationalist awakening of its citizenry. This led to the 1911 Revolution and, eventually, national disintegration during the warlord era.