Anatolia and the Mediterranean to the interior of Europe, through which China played an
important role in the trade of goods such as silk, spices, precious jewellery and paper
(Frankopan, 2015). However, geographical discoveries from the 16th century onwards
led to the loss of the importance of land trade routes as sea routes became more
advantageous (Brook, 2010). As a result, China's economic power gradually declined,
and the country began to decline in the global trade system. With the onset of the
Industrial Revolution in Europe (Babones & Chase, 2012), the shift of production to
mechanised industry led to a change in global trade networks, and China lost its
competitiveness against the industrialised West (Pomeranz, 2000).
China's economic decline also had major political repercussions. The Opium Wars (1839-
1842, 1856-1860) revealed China's weakness in the global system and its vulnerability
against foreign powers (Fairbank & Goldman, 2006). As a result of these wars with
Britain, China was forced to sign the Treaty of Nanking in 1842, ceding Hong Kong to
Britain and opening its ports to Western powers (Spence, 1990). Similarly, the Sino-
Japanese War of 1894-1895 symbolised China's loss of regional dominance and the rise
of Japan in East Asia (Vogel, 2011). Following this war, China's sovereignty over Taiwan
came to an end, and Japan gained a clear dominance over Chinese territory (Meisner,
1999). These developments caused China to remain in the background in world politics,
and the country was increasingly dragged into internal turmoil under the influence of
imperialist states.
In 1912, as a result of the Wuchang Uprising, the Qing Dynasty was overthrown, and the
Republic of China was established (Garnaut, Song & Fang, 2018). However, this transition
process failed to stabilise China, and economic, political and social problems deepened
(MacFarquhar & Schoenhals, 2006). Within the newly established Republic of China, the
increasing influence of the Communist Party and its political conflicts with the
Kuomintang further increased the instability of the country (Baum, 1996). Chinese
domestic politics became an arena of conflict between different political groups supported
by the US and the USSR, which led to serious instability in the country (Nathan, 1990).
Japan's invasion of Manchuria in 1931 once again showed China's weakness in the face
of external threats. When Japan declared war on China in 1937, the Communist Party
and the Kuomintang government suspended their civil wars and formed a common front
against Japan (Vogel, 2011). However, this unity came to an end after World War II, and
civil war flared up again in China. In 1949, the Communist Party led by Mao Zedong won
the civil war and established the People's Republic of China (Shirk, 1993).
The Mao period (1949-1976) was characterised by China's closed economy and
authoritarian rule. Mao's economic policy focused on centralised planning based on heavy
industry under state control, and foreign trade was limited (Meisner, 1999). Mao's
Cultural Revolution (1966-1976) and Great Leap Forward policies were implemented with
the claim of strengthening the Chinese economy, but led to major economic setbacks
and social crises in the country (MacFarquhar & Schoenhals, 2006). During the Cultural
Revolution, millions of people were arrested on political charges or forced labour and
economic development was severely hampered (Fairbank & Goldman, 2006). By the end
of this period, China increasingly lagged behind the Western world economically and
remained outside the world trading system.