policies are divided in two: the state policies that are directly affect the economy (industrial and monetary policies) and government’s social policies that indirectly affect the economy (Pierson 2004, p.80). China is one state that was characterized by capitalism during its transition to a modern economy towards the end of Qing dynasty. The process of modernization was slow and often met with a lot of interruptions.
Capitalism can be defined as the inclination towards a steady accumulation of wealth, this is according to Pirenne. Periodization of capitalism into early, high and late capitalism was made by a German economist, Werner Sombart and late capitalism is referred to as state capitalism and it happened between the period 1880 and the start of imperialism by Lenin (Goody 2004, p.3).
The Qing dynasty dealt with the foreign people using the same methods that they dealt with other Asian countries. The war started in 1839 when Imperial Commissioner Lin Zexu ordered suppression of drug (opium) trade between foreigners and the local merchants. The aim was to take away the control of opium trade from foreigners. He wanted the same control of trade as administrators had in Britain. After several wars with the British, China finally lost and agreed to form more trade concessions with the British. It saw the signing of the 1842 Treaty of Naijing and the treaty was in favor of the British. Defeat in the Opium War lead to the opening of the West into China and brought in a new era of Western Imperialism. The British captured the Guangzhou port and neighboring ports such as the Shanghai port and finally sailed upwards along the Yangzi River to Naijing. Many of the Qing officials committed suicide when they realized that they could not defeat the British. This is because the Qing dynasty had no enough armies and was lacking funds (Ebrey, Palais and Walthall 2008, p.298). Before the Opium War, the Europeans were allowed to trade at only one part of China, at the port ...
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