Organized Panel Session
Historiography on foreign debt incurred by the Qing government between 1895 and 1911 has focused on its links with great power politics and global networks of finance. This paper suggests a shift in focusing on debts’ effects on Chinese practices and thinking on political economy, and argues that both the burden of debt and perceived threat of “super-sanctions” effectively dismantled residual opposition and ambivalence towards fiscal reform.
Through documenting the policies and arguments made by central and local governments at meeting repayment schedules, the threat of direct foreign intervention over local finances became a useful instrument not only for ensuring prompt repayment, but also for fiscal centralization and reorganization of local finances. The confluence of interest rate multipliers inherent in debt and prolonged decline in silver prices in early 1900s sustained the revenue-raising efforts throughout the decade, increasing revenue levels by over 22% in nominal terms for the period.
The effects of foreign debt burdens propelled contemporary discussions of political economy to focus on revenue growth via fiscal reform and the promotion of Chinese enterprises. The rhetorical appeal towards expediency and fear tilted the debate on fiscal and industrial policies decisively towards enabling and protecting domestic growth, relegating concerns about domestic social stability and peasant welfare. By realigning the standards of state legitimacy, the foreign debts paved the way for growth-oriented governing ideologies in twentieth-century China.