Chinese economy Essay Example | Topics and Well Written Essays - 500 words

Chinese economy - Essay Example China was forced to open coastal ports resulting in a steady flow of trade between the West and the East. According to Rit Nosotro, â€Å"Although the Europeans introduced railroads, highways, and started some industrial activity, the overall effect on China’s economy overall was negligible since it did not involve the hundreds of millions of peasants deep in the interior†. During the early and mid Qing period there was a considerable rise in Chinas population. But since there was no substantial industrial development China could not utilize the excessive manpower nor raise the standard of living. The economic condition of the government was poor since the dynasty could not collect enough taxes from a poor society. Also there was serious corruption as the government ate away a large part of the taxes collected. The powerful landlords evaded government taxes. All this led to a huge tax burden on the peasants. When these oppressed peasants rebelled (Taiping rebellion) the dynasty had to spend more money to control this rebellion thus making the financial conditions even worse. From the mid-19th century onwards political decentralization made collection of taxes more difficult.. Administrative inefficiency led to inefficient financial management. Also the unequal treatises prevented China from raising tariffs on foreign trade to pay off deficits and the government had to take huge foreign loans. To overcome the money problem, government increased domestic taxes causing more rebellions. Also there was an unfavorable balance of trade which reduced the value of the countrys currency thereby reducing the governments income. The wars that China fought with the foreign powers and the resultant war indemnities China had to pay in 1842, 1860, 1896 and 1900 also dented the economy. Finally in 1911 the Qing dynasty was overthrown. In a planned economy or direct economy the state manages the economy.