Historical Studies (Chinese Edition)

No.2, 2019

 

The Qing Government’s Fiscal Quagmire and Its Response around 1850 (Abstract)

 

Ren Zhiyong

 

By the late 1830s at the latest, the Qing government was mired in a dangerous long-term fiscal balance in which revenue barely equaled expenditure. The military expenses of the first Opium War and the exposure of the corruption and deficit of the Ministry of Revenue in the 23rd year of the Daoguang reign, to the great distress of its officials, led the Qing government to take a number of measures that allowed reserves to recover to around ten million taels after 1849. In 1853, however, the government incurred huge costs of around 30 million taels spent on river conservancy and suppressing the Taiping Rebellion. Thereafter, the government had no chance of maintaining its financial position. Among the various remedial measures implemented by the Ministry of Revenue, levying a commercial tax and introducing financial reform were the most significant. However, the failure to collect commercial taxes meant that the Qing government largely relinquished the collection of commercial taxes other than likin, with a consequent rise in likin that was blamed on the government. In terms of finance, the casting of larger cash and the issue of banknotes also failed, because no consideration was given to the question of credit and many details were overlooked. This affected the introduction of Chinese paper money and brought about a loss of financial control.