This chapter reviews the political and institutional reforms made by the Ch'ing government after 1901 with some conspicuous points. First, there were many self-defeating contradictions among the reform plans. For example, while creating the National Assembly and Provincial Assemblies in order to widen the path for the expression of public opinion as part of the preparation for constitutionalism, the government put increasingly strict controls over all expression of thought. Once the Ch'ing had accepted the idea of constitutionalism, Chinese intellectuals began to demand the immediate opening of the parliament. Secondly, all the participants in the reform programmes sought their own interest. The reforms after 1901 were promoted mainly by Jung-lu, a Manchu grand councillor, and Chang Chih-tung, Liu K'un-i and Yuan Shih-k'ai, who were Chinese governors-general. Finally in 1908, when the emperor and the empress dowager both died, and Prince Ch'un became the prince regent, Yuan Shih-k'ai was forced to retire to Honan.

Many scholar-officials' main emphasis was on modern industry. They generally assumed that commercial enterprises could at best play a supporting role. Influential officials who became major sponsors of modern enterprise were especially partial to industry. From the early 1870s, Li Hung-chang argued that guns and gunboats alone did not make a nation strong; their operation required the support of industry in manufacturing, mining and modern communications; industry would create new wealth - a further source of national strength. Chang Chih-tung, too, realized the link between military power and economic development. Chinese promotion of modern enterprise in the late nineteenth century was inspired by the political necessity of quickly achieving respectable national strength. This fundamental goal united government officials of various persuasions in a common commitment to industrialization. A few modern enterprises were able to avoid either official sponsorship or comprador management. Hua-hsin was in fact a private enterprise in which official and merchant shareholders collaborated as individuals.

This chapter provides an analysis of the structure and development of Chinese agriculture in the nineteenth century and its implications for the rest of the economy. It discusses the single rural handicraft in the nineteenth century. The agricultural sector of the Chinese economy in the last decades of the Ch'ing dynasty was characterized by a factor mix in which land and capital were in short supply and the superabundance of labour was subject to some diminishing returns. Handicraft and modern industries in late nineteenth-and early twentieth-century China were subservient to foreign capitalism. The economy of late-Ch'ing China was, at its given level of technology, characterized by a high degree of commercial development. Goods and traders moved extensively throughout the country and, to a limited extent, the domestic economy had developed links with the world market. In brief, the fiscal system of the central government like other aspects of its administration was quite superficial.