In October 1874, at the height of the protracted Sino-Japanese confrontation over the killing of Ryukyu castaways – whom Japan regarded as its subjects – the Qing government was engaged in a major effort to secure foreign loans. The Qing had made such attempts in earlier decades but now was seeking to borrow on a much larger scale, to the tune of several million silver taels, and to be used as payments for foreign weaponry. The Economist noted that it would be a serious development if the Qing government succeeded in securing these loans. Around this time, both the Qing government and Japan were scrambling to acquire as much state-of-the-art Euro-American weaponry, ammunition, and gunboats as possible. Footnote 1 According to the magazine, it was loan agreements, rather than the bitter exchanges between the Qing and Japan, that would determine the prospect of a devastating, full-scale war.Footnote 2
In hindsight, the Taiwan Incident represented the moment at which the key features of the Qing government’s new mode of war preparation had fully matured. Unlike the mode of the eighteenth and early nineteenth centuries, this new mode involved what might be described as an internationalized approach. It required promptly (or even hastily) mobilizing personal connections to secure both foreign weapons and loans – two types of international resources that were often tied to each other in wartime due to the lender’s or arms dealer’s demands and the Qing’s financial constraints.Footnote 3 More than ever, access to foreign weapons and loans preoccupied the officials responsible for dealing with these conflicts. Thanks to the establishment of treaty ports in East Asia, as well as advancements in global communications and transportation technologies, and most importantly, the efforts made by various actors who facilitated war preparations in one way or another, this process became the standard procedure in all major armed conflicts in the empire’s last decades.
Markedly different in both nature and magnitude from mid-nineteenth-century precedents, the Taiwan Incident represents a critical case for analyzing the Qing’s new mode of war preparation. Evidently unprepared for Japan’s unexpected military challenge, the Qing began by negotiating its first public loan with the Hongkong and Shanghai Banking Corporation (HSBC) – later the foremost foreign lending bank in China – an arrangement that constituted sovereign debt.Footnote 4 Second, there was a close link between the Qing’s borrowing and weaponry: Imperial Commissioner Shen Baozhen intended to use foreign borrowings to acquire ironclads, rifles, cannon, and ammunition from abroad.Footnote 5 Third and most importantly, Qing officials were preoccupied with foreign loans and arms, which, while not replacing domestic resources, took on an unprecedented and essential role in their planning. Fortunately, the Taiwan Incident left a substantial paper trail in multiple languages, making it possible to reconstruct the processes and participants involved in this new mode of war preparation. Furthermore, the Taiwan Incident triggered a profound policy debate over maritime defense versus frontier defense, a debate that could determine whether Hunan Army commander Zuo Zongtang would be able to launch his planned campaign to reconquer modern-day Xinjiang.Footnote 6 Zuo regarded foreign loans as the solution to financing his military campaign and, tellingly, sought Shen’s assistance in contracting a ten-million tael loan – the largest borrowing ever proposed at the time – because of Shen’s experience during the Taiwan Incident.Footnote 7
The said Sino-Japanese confrontation, also known as Japan’s Expedition to Taiwan, the Mudanshe Incident, or the Taiwan Incident, refers to Japanese military operations and Chinese responses in southern Taiwan between May 6 and December 2, 1874. The incident was sparked when fifty-four Ryukyu castaways were killed by Taiwanese “aborigines” (fan 番) in 1871. Three years later, Japan retaliated by sending troops to southern Taiwan, reportedly in the name of justice, but with long-term colonization in mind.Footnote 8 The incident can be understood as part of Japan’s broader policy to incorporate Ryukyu fully into its polity, transforming the islanders into Japanese subjects and ending Ryukyu’s ambiguous dual submission to both the Qing and Japan.Footnote 9 In southern Taiwan, the Qing’s territorial claim did not conform to Euro-American notions of sovereignty, since the claim was not backed by substantial political and military presence in the region.Footnote 10 Throughout the year, the Qing and Japan continued diplomatic negotiations but simultaneously made extensive war preparations. War as a solution was never completely off the table.
While scholarship on the Taiwan Incident is vast, substantial treatment of key activities of war preparations, such as lending and arms trade, is surprisingly rare, let alone connecting these separate topics to a wider trend.Footnote 11 Historians who have studied the actual processes of Chinese and Japanese military operations, diplomatic negotiations, and the event’s long-term consequences for international relations and the Qing’s late-nineteenth-century modernization efforts have generally focused on the roles played by prominent Chinese, Japanese, or Euro-American statesmen and diplomats, making only passing reference to the activities of non-political actors such as merchants or civilians. Other recent scholarship has centered the experiences of non-political actors including the Indigenous peoples, merchants, and civilians but does so in the context of the local rather than the international. This article takes a different tack: by focusing on the Qing’s preparations for war in 1874 and the full range of participants involved, this article shows the emergence of a new mode of war preparation in the Qing.Footnote 12
In a world dominated by imperial powers, the Qing empire’s resilience can be partly attributed to its new mode of war preparation. Stephen R. Halsey has persuasively theorized this resilience as the result of a highly successful Chinese military-fiscal state. I argue that foreign loans and weapons were essential components of this effective state-making. The key lies in what Halsey termed the Qing’s “mediated economy,” which preserved a measure of economic autonomy. This condition, I suggest, enabled the empire to capitalize on foreign loans and arms sales while avoiding formal colonization.Footnote 13
In the first section, I will trace the development of the Qing’s new mode of war preparation from the mid-nineteenth century onward. Using the Taiwan Incident of 1874 as an example, I will examine in the second and third sections the two interconnected activities of this process: securing foreign weapons and loans and how the Qing obtained these critical military and financial resources. Although these wartime transactions were often kept secret from the public, I will explore the roles played by various individuals and institutions that facilitated these transactions as much as possible. The fourth section highlights one specific problem connected with this new pattern of war preparation: the competition for limited resources on the global market. Taken together, these examples demonstrate that Qing war preparations in the 1870s were global in nature and reliant on connections, coordination, and competition.
Historical context
The new mode of war preparation was connected to global mass production in the nineteenth century, even though the sale of arms had existed for centuries: Since the sixteenth century, firearms manufactured in Europe flowed legally and illegally between European countries and their overseas colonies in Africa, America, and Asia. Portugal, the Netherlands, and later Britain were major sources of arms sold internationally. Arms were used to exchange for local commodities such as slaves and fur.Footnote 14 In contrast, the Taiwan Incident occurred during a period of mass production and expanded trade in firearms. Between the 1850s and 1880s, major advances in firearms technology, most significantly interchangeable parts and machine tool precision, were adopted in firearm production. At the same time, Western countries were transitioning from muzzle-loading to breech-loading rifles, rendering many rifles outdated. These developments created a global market for non-Western countries to obtain weapons in bulk.Footnote 15 Major manufacturers in the United States, Germany, and Britain eagerly sought overseas markets for their surplus due to increased production capacity and fluctuating domestic demands. The Ottoman Empire was the largest consumer, but the Qing also had huge demands for weapons, especially during wartime. Arms traffic was largely unrestricted until the 1880s. At that time, Britain, France, and Italy made the first attempts to restrict the flow of weapons, with limited success. On this issue, metropolitan companies and colonial officials had competing interests, and different countries vied for overseas markets. These conflicts of interest rendered arms control ineffective.
As late as the mid-seventeenth century, the Qing empire and Western Europe were comparable in terms of weaponry technology. This was partly due to the Qing’s adoption and improvement of military technology developed in Western Europe. However, Chinese firearms did not substantially improve afterward – possibly, as Peter C. Perdue has suggested, because of the Qing’s successful conquest of its long-time rival, the Zunghar Mongol state, in 1760Footnote 16 – and by the nineteenth century, Western military technologies were far superior. This was not an immediate concern, as the Qing Empire was not seriously challenged militarily in East Asia before the mid-nineteenth century.Footnote 17
For the most part, the Qing’s war preparations in the eighteenth and early nineteenth centuries were domestically based. Weapons were state-manufactured – produced by the Ministry of Works, provincial authorities, or local counties near the frontlines.Footnote 18 Likewise, wars were funded solely through domestic financial resources, particularly government revenues. In fact, eighteenth-century China operated on the principle that only revenues – not loans – should be used to finance warfare.Footnote 19 As the state’s fiscal condition deteriorated, especially from the early nineteenth century onward, Qing society increasingly shouldered a greater share of military expenditures.Footnote 20 As economic historian Ghassan Moazzin has pointed out, the Qing lacked the institutional infrastructure to mobilize large sums of capital for major projects and wartime needs; foreign banks only began to meet such demands in the latter half of the nineteenth century.Footnote 21
This began to change during the suppression of the Taiping War in the 1850s and 1860s as the Qing began to explore international purchasing and borrowing for the first time.Footnote 22 Senior officials across the Qing empire increasingly agreed on the necessity of adopting superior Western weaponry.Footnote 23 Notably, Li Hongzhang began to extensively equip his army with such arms.Footnote 24 In this era, Qing authorities began to take out foreign loans. Most of these early borrowings were under one million silver taels, in stark contrast to the much larger sums – each amounting to several million – borrowed for subsequent wars.Footnote 25
Military emergencies brought on by the Taiping War prompted Qing officials to solicit or accept military assistance from foreign powers, including direct British and French military intervention, the employment of foreign officers, and the provision of training and arms.Footnote 26 However, key regional and central officials – most notably Zeng Guofan and Li Hongzhang – remained wary of such involvement in the Qing’s military affairs. Zeng feared that foreign intervention could allow foreign troops to gain a foothold in the Qing.Footnote 27 Li, for his part, aimed to keep military affairs firmly under control – that is, to arm Qing troops with imported weapons and upgrade the Qing’s overall military capabilities without allowing foreigners to exert influence over military operations or decision-making.Footnote 28
As a growing number of officials came to view the adoption of advanced foreign arms as an urgent priority, two main approaches to acquiring such weapons emerged: domestic production and international purchases.Footnote 29 To reduce the empire’s dependence on foreign suppliers, Qing officials promoted domestic production.Footnote 30 At the core of these efforts was the goal of military self-reliance – a position strongly held by Li Hongzhang, even though his Huai Army made extensive use of foreign arms and accepted other forms of military assistance.Footnote 31
To achieve military self-reliance, Qing officials established arsenals to domestically manufacture arms and ammunition by reverse-engineering Western military technology. However, as Wang Ermin pointed out, domestic production was costly, inferior in quality, and insufficient in scale.Footnote 32 Tellingly, in the early 1870s, Li Hongzhang refused to equip his army with substandard, domestically produced breech-loading rifles.Footnote 33 During the Sino-Japanese War of 1894 – 1895, “the provincial arsenals proved to be a great disappointment…so as usual the government was forced to purchase arms from foreign firms.”Footnote 34 In short, despite the growth of domestic production, large-scale international purchases continued, and imported weapons were used in all major battles throughout the second half of the nineteenth century.Footnote 35 It was against this backdrop that the international mode of war preparation developed in parallel with domestic efforts.
In the post-Taiping era, the Qing empire increasingly relied on foreign arms and loans in its major military operations. In the 1860s, foreign arms and loans began to play an increasingly significant role in Zuo Zongtang’s military campaigns in the northwestern regions of the Qing.Footnote 36 The mid-1870s marked the full maturation of the new mode of war preparation and the consolidation of Qing frontiers. The Taiwan Incident and Zuo Zongtang’s expedition to modern-day Xinjiang were both major military operations in which Qing officials were heavily preoccupied with large-scale foreign arms deals and loans. Both military events demonstrated to officials that domestic arms production alone was insufficient to meet the empire’s military demands and that foreign arms and loans would be needed.Footnote 37 From the court’s perspective, this reliance on foreign resources marked a significant concession, undermining its longstanding preference for military self-reliance.
Regarding foreign loans, in 1874, the court approved the two largest-ever foreign loans requested by Shen Baozhen and Zuo Zongtang – Shen’s for the defense of Taiwan and Zuo’s for the reconquest of modern-day Xinjiang. Zuo was authorized to borrow three million silver taels; two years later, he requested an additional ten million, of which five million was ultimately approved.Footnote 38 In the 1870s and 1880s, Zuo secured foreign loans totaling more than fourteen million to finance his military campaigns across various parts of the empire. And the pattern continued: During the Sino-French War of 1884 – 1885, the Qing borrowed at least eighteen million, and in the Sino-Japanese War of 1894 – 1895, that figure rose to forty million.Footnote 39 Both wars marked periods in which the procurement of arms was carried out with exceptional urgency.Footnote 40
In summary, during the 1850s and 1860s, the Qing began its use of foreign loans and arms – albeit on a modest scale – in its military confrontations with Taiping forces. Although most political elites continued to advocate for military self-reliance, the two major military events of the 1870s – the Taiwan Incident and the reconquest of Xinjiang – demonstrated that global resources had become indispensable to the Qing in times of crisis. This new mode of war preparation recurred throughout the final decades of the empire, operating in parallel with a growing effort to promote domestic arms production.
Purchasing weapons
The Qing empire’s mobilization of its army during the Taiwan Incident highlights the empire’s emphasis on superior Western armaments. Alarmed at the landing of the Japanese troops in southern Taiwan, the Qing began to mobilize its crack troops for an imminent war.Footnote 41 At the suggestion of Li Hongzhang, the court agreed to dispatch the commander Tang Dingkui and his army to Taiwan, totaling 6,500 troops. Another 3,500 men from another province could be mobilized when needed, although in the end this did not happen.Footnote 42 Tang’s army was one of the best in the Huai Army, which distinguished itself from many other troops in the Qing by its adoption of foreign weapons, including cannons and rifles, beginning in the 1860s.Footnote 43 By the 1870s, Tang’s troops had participated in the pacification of the Taiping and Nian rebels.Footnote 44
Early on, state-of-the-art breech-loading rifles were highly desired by the Qing (and Japan), as a breech-loading rifle could be fired four time faster than its muzzle-loading counterpart.Footnote 45 Although Tang’s troops were among the rare Chinese troops equipped with advanced firearms, these weapons were not the latest breech-loading but dated muzzle-loading rifles. Even worse, those forces guarding Taiwan before Tang’s arrival, including Taiwan’s standing army and troops from mainland Fujian, used even more inferior weapons such as matchlocks.Footnote 46 As for officially recruited Taiwanese braves, they used bows, arrows, and spears.Footnote 47
Several factors prevented even the Qing’s best troops from upgrading their firearms. The first factor was the lack of a reason that can justify the costs. Li Hongzhang was probably second to none among Qing officials when it came to military reforms in a Euro-American fashion. However, even Li, likely out of financial constraints, did not widely equip the Huai Army with the advanced breech-loading rifles. Li stated that no immediate threats justified the use of this kind of weapons.Footnote 48 Most orders of advanced arms were thus placed only when the Qing was making preparations for imminent war. Second, in terms of state-of-the-art rifles, the Qing’s manufacturing capability was still limited. Jiangnan Arsenal, the flagship arsenal of the empire, only produced 65,300 rifles between the 1860s and the 1900s.Footnote 49 Third, these domestic products were of inferior quality.Footnote 50 Even Li’s army refused to use domestically made breech-loaders.
Fortunately for Li and Shen Baozhen, firearms and other weapons were generally available on the global market, although temporary surges in demand caused difficulties for large orders. In the mid-nineteenth century, the arms industry boosted its production exponentially through industrial mass production. The result was large quantities of firearms for sale. In the United States, the Civil War led to a strong demand for weapons. However, the domestic market plummeted following the end of the war, and many arms producers went bankrupt. Among more than two hundred arms producers in the middle of the century, only one out of ten survived at the century’s end. One key survival strategy was to find overseas markets. In this regard, the US government posed no obstacle. Before the twentieth century, “the freedom of private arms exports” was in general, not only unrestricted but also respected by the government.Footnote 51
Global operations and the flow of weapons
The Qing empire’s purchases and shipments of weapons manufactured in Western countries demonstrate that the new mode of war preparation was made possible by global operations and cooperation. Early on, connections with foreigners were conducive to the Qing’s military purchases. In June 1874, only a few weeks after Japan’s incursion into southern Taiwan, Shen requested permission to purchase 15,000 Remington rifles, the famous breech-loaders made by the Remington company based in New York.Footnote 52 Shen’s request was in fact at the advice of Prosper Giquel, a French consultant who worked for the Qing at the Foochow (Fuzhou) Arsenal and was vital for the construction of a naval dockyard and fleet. Shen highly – some said excessively – trusted foreign experts working for the Qing, for which he attracted criticism from his colleagues.Footnote 53 It was no exception when it came to arms sales. Shen entrusted Giquel with making the purchases that Giquel himself recommended to Shen.
While it is unknown exactly how Giquel purchased the Remington rifles for the Qing, his efforts to obtain ironclads show his role as middleman. Although Giquel was French, he had had conflicts with the French Minister in Beijing and instead contacted Thomas Francis Wade, the British Minister to the Qing.Footnote 54 According to Shen, Giquel emphasized the importance of asking foreign ambassadors to act as middlemen for the Qing’s military purchases. These diplomats would assist with securing vessels of good quality at low prices. Agreeing with Giquel, Shen attempted to convince Li Hongzhang and the Zongli Yamen of Giquel’s opinion.Footnote 55
Giquel proved to be a capable agent, successfully finding Remington rifles for Shen. According to Giquel’s report, each Remington rifle, along with 400 bullets (yaozi 藥子), was priced at thirty-one silver taels.Footnote 56 In the end, Giquel was only able to order 6,000 Remington rifles due to limited availability. These rifles were expected to be delivered in September.Footnote 57 The exact date of the delivery is unknown, but the rifles certainly arrived in the Qing before December.Footnote 58
The departure of large quantities of Remington rifles and other weapons from Europe to the Qing was noticed by European newspapers. On September 7, The Times (London) intercepted intelligence on the arrival of six thousand Remington rifles in France, probably originally from the United States. According to the newspaper article, the intelligence was “emanating from an authentic source” and had “a precision which adds to its credibility.” The description shows that the goods, including five to six thousand rifles, ammunition, cannons, and even a battery, were transported between several places in Germany, France, and Britain, before heading for Fuzhou and Shanghai in early September.Footnote 59
The Marseilles packet of the 31st of August conveyed 68 chests of Remington rifles, 1,300 in all. These rifles come from the entrepôt of Cherbourg, and were destined for Shanghai. A battery of six pieces Montagne [Montagne cannons] has just been despatched from Germany, via Belfort, for Foochow. It will be embarked at Marseilles on the packet of the 6th. The Messageries Company having refused to take 4,000,000 cartridges from Cherbourg, Mr. Morris, of the Boulevard des Capucines, offered a Havre steamer which would embark at Cherbourg 5,000 to 6,000 Remington rifles and 5,000,000 cartridges. The steamer is now loading at Havre, whence it will proceed to London to take in a cargo of arms and military equipment. Other Montagne cannons will shortly be despatched. The wheels and gun-carriages will be sent from France, and are all in readiness, their destination being Foochow and Shanghai. A German is at the head of these operations.Footnote 60
The identity of the German person “at the head” of this global operation was unknown. Nevertheless, as the timing, destination, and quantity of these shipments matched Shen’s order, the rifles and other weapons mentioned in the quoted newspaper article were most likely the rifles ordered by Shen through Giquel. It is clear that this transaction involved multiple actors from many countries – it was a truly global endeavor.
While it is difficult to trace the rifles once they departed from Europe, we do know of a domestic transportation of 560 German-made Snider breech-loading rifles (Tunaide qiang 土乃得鎗) and their ammunition inside the Qing. In early August, Li purchased 560 Snider rifles and transferred them to Tang Dingkui’s troops that were being dispatched to Taiwan. At this moment, the Remington rifles that Shen ordered had not yet arrived, and Shen thus asked Li to lend them the Snider rifles. The Snider rifles were probably purchased by the Shanghai Weaponry Purchase Bureau (Shanghai caiban junhuo ju 上海採辦軍火局).Footnote 61 This kind of bureau proliferated during the Taiping War (1850 – 1864), as Qing officials strove to maintain the function of local governments when much of the territory in central and southern China was under Taiping occupation.Footnote 62
The rifles, along with 211,400 bullets, were shipped to Taiwan under the arrangements made by Sheng Xuanhuai, the renowned merchant and a founding member of the China Merchants Steam Navigation Company. At this time, this young man – he was only thirty – was entrusted by Li Hongzhang with the logistics of transporting Qing armies and resources to Taiwan. Apparently, Sheng’s managerial skills were recognized and valued. Sheng used the steamer Liyun to ship the Snider rifles, which Tang received in early September.Footnote 63 This was the first time that Tang’s army was equipped with a significant number of breech-loading rifles. Although the rifles were successfully delivered, thirteen boxes of ammunition were missing. It was reported that these boxes had been placed beneath the coal on the steamer and could not be retrieved until the vessel’s next visit to Taiwan. To be on the safe side, Tang informed Sheng of the incident (which in fact helped create the paper trail documenting the transfer).
Gunpowder was imported for the defense of Taiwan as well. By the time the Snider and later the Remington rifles arrived in Taiwan, a large quantity of gunpowder had been obtained. On July 18, the Qing purchased 80,000 pounds of gunpowder somewhere near Hong Kong. The gunpowder was transported to Taiwan and then stored in a magazine newly built on the summit of Fort Zeelandia in the town of Anping.Footnote 64 Anticipating the arrival of many military supplies, including firearms, guns, and related components and supplies, Taiwanese authorities began to build storage facilities for military equipment and ammunition in mid-July.Footnote 65
It would be a mistake to view the above-mentioned instances of war preparations as a fully centralized and carefully coordinated process, however, as the China market included numerous Chinese and foreign actors with competing interests.
Actors and institutions on the China market
Various actors and institutions, notably including foreign participants, played an essential role in the Qing’s new mode of war preparation. Individual and institutional actors included Chinese and foreign ambassadors, Chinese Maritime Customs Service staff, especially Inspector-General Robert Hart, aides and subordinates of influential officials such as Li Hongzhang, Chinese compradors and merchants, various bureaus established for handling emergencies or modernizing projects, foreign employees and consultants at various official or semi-official institutions, foreign firms specializing in the import and export trade in Shanghai, Hong Kong, and Tianjin, and agents of Euro-American manufacturers.Footnote 66 However, their efforts were not always coordinated, and overall arms purchases were not centralized.
Arms sales were a competitive business. Understandably, Shen Baozhen was approached by dealers and agents of Euro-American manufacturers, who were eager to seize the business opportunities created by the Sino-Japanese conflict. When Shen was managing the Qing’s defense efforts in Taiwan, dealers were selling weapons on the island. For example, in mid-July, Shen had a look at the latest British-made Martini–Henry rifles (Madini’anhai qiang 麻抵呢安孩槍), courtesy of someone called Wu Muchong 吳母蟲. Wu Muchong’s identity is unknown, but the name could be the Chinese transliteration of a foreign name.Footnote 67
The famous W. G. Armstrong & Company, a major British weaponry manufacturer, sent their agents directly to the Qing in 1874.Footnote 68 Meanwhile, a Mr. Bidwell, the company’s authorized agent and a partner of Bucheister & Company in Shanghai, was also very active on the China market. Receiving intelligence about Bidwell’s activities in China, Robert Hart, inspector-general of the Chinese Maritime Customs Service, commented that Bidwell “could not arrive in China at a better time. This Formosa affair [the Taiwan Incident] has given everything a little fillip, and the Mandarins are ready to try iron-clads, monitors, catapults, cross-bows, Krupps, old clo’s….”Footnote 69 The activities of these agents demonstrate a keen awareness of the commercial opportunities generated by the Taiwan Incident.
Bidwell might have cooperated with Sheng Xuanhuai. Sheng mailed several lists of weaponry purchasing recommendations for Shen’s consideration, and Shen mentioned “those items listed by Bidewei (Bidewei suokai 畢德衛所開),” apparently the Chinese transliteration of Bidwell. Shen did not consider these items to fit the needs of Taiwan’s defense but nonetheless forwarded all the lists to the trusted Giquel for a final decision. Bidwell and Sheng’s competitor, in this case, was a person surnamed Xu.Footnote 70 Xu also made a purchase recommendation, which was preferred by Shen.Footnote 71
Foreign firms in China had long participated in the arms trade, and participating firms and individuals had their own sources of imported weapons. In an 1878 advertisement in Shenbao, the major Chinese-language newspaper of the time, the firm Huadai (華岱, original name in English unknown) advertised weapons from continental Europe, such as guns, firearms, and even ironclads or other types of warships. To establish its reputation, the firm claimed two decades of experience in arms import in China. According to the firm’s advertisements, Li Hongzhang was among its clients.Footnote 72
As to British-made weapons, in 1874, two foreign firms frequently advertised weapons in Shenbao. One of them was Zaisheng 載生. As the authorized agent for a major British manufacturer, Zaisheng sold rifles, guns, gunpowder, and so on.Footnote 73 The other was the Shanghai-based firm Diers (Deyashi 地亞士). The firm claimed to have been in this business for years and had fulfilled orders from various bureaus in different provinces.Footnote 74 Another potential source of British firearms and gunboats was Inspector-General Robert Hart. He instructed his trusted agent in London to contact major British manufacturers directly.Footnote 75
American weapons also had a presence in China. The manufacturer E. Remington & Sons widely utilized advertising targeting either US or overseas markets to boost the sale of its rifles.Footnote 76 In 1875, the company’s advertisements appeared frequently in Shenbao.Footnote 77 Remington seemed to have a long-term relationship with the major American firm Augustine Heard & Company (Qiongji 琼記), which was active in the sale of Remington rifles in China.Footnote 78
At least occasionally, several dealers competed for the sale of the Remington rifles. One such dealer, Agenda 阿根大, invited customers to his or Shenbao’s office to inspect samples.Footnote 79 Even firms not specializing in the arms trade could participate in the business. For instance, Madelong 馬德隆, one such firm, sold mostly goods unrelated to military purposes but offered rifles as well.Footnote 80
To complicate the arms trade further, brokers and manufacturers primarily conducted business with provincial authorities and their various bureaus rather than the central government.Footnote 81 This explains the dealers’ incentive to place advertisements in the widely read newspaper Shenbao: since the Qing did not purchase weapons through a central bureau, it was beneficial for sellers to reach potential customers in different provinces. Long before 1874, provincial or even lower-level governments had purchased foreign weapons on their own. It was common that whenever military operations took place, local authorities would have to secure weapons. For instance, just as Japanese troops were arriving in Taiwan, Governor of Zhejiang Yang Changjun planned to purchase cannons and foreign firearms. To that end, he sent an agent at the rank of county magistrate to Guangdong province, where the agent successfully found available items.Footnote 82 Another example is from the Yunnan province in Southwest China. At some time, probably prior to 1874, Yunnan authorities ordered 3,000 rifles.Footnote 83
The consequence of decentralized military purchases was that the weapons used by Qing troops were not standardized.Footnote 84 When it came to military affairs or other modernizing initiatives, regional administrators and powerful statesmen had their own plans and preferences, often uncoordinated with one another or even conflicting. A telling example is that the Qing empire did not use a single kind of rifle, as the British did, but quite a few types as a result of local acquisition initiatives. For instance, when part of Tang’s troops, numbering 4,000, arrived in southern Taiwan on August 25, they carried all sorts of firearms, including breech-loading rifles, muzzle-loading rifles, and muskets made in China.Footnote 85 At the end of 1874, Li stated that the Qing had obtained Remington and Snider rifles. He and Shen both had thousands of Remington rifles. Nevertheless, Li also wanted to order a few British-made Martini–Henry rifles and to obtain thousands of Bierdanu 俾爾打呶 rifles made in Russia.Footnote 86
With the flow of arms managed by different parties at different stages, the process was fragmented and susceptible to errors or disagreements. A telling example can be found in a 1874 lawsuit involving several interconnected arms sales that involved multiple foreign firms and Chinese provincial governments.Footnote 87 At an unspecified time, Yunnan provincial authorities ordered 3,000 rifles from the firm Lutai 履泰 and later asked the firm Zaisheng to assist with reselling 500 of them. The 500 firearms were stored in another firm’s warehouse. At a total price of 5,000 silver taels, Zaisheng resold these 500 weapons to Diers. Diers shortly found an official buyer, the Shanghai intendant, and was expected to make a profit as high as 2,600 silver taels, or a 52% return on investment. However, when the firearms were retrieved from the warehouse, they were not only rusty but also of a different model. The deal was therefore not concluded. Diers sued Zaisheng, and in turn, in 1874, Zaisheng sued the Chinese clerk who had been assigned by a subordinate of the Yunnan provincial authorities to handle the transaction. In the court presided over jointly by German and Chinese officials, the Chinese clerk was accused of replacing the promised Snider rifles, one of the best makes at that time, with inferior firearms. This case illustrates how a complex web of actors and institutions enabled the flow of weapons across regions. In total, four firms were involved in the storage or sale of these firearms. These companies served the Yunnan and Shanghai authorities, who were unaware of each other’s military needs.
Thanks to various kinds of official and nonofficial actors, Chinese authorities managed to obtain large quantities of foreign weapons for the defense of the empire and its frontiers. However, these officials had to find sources of funding for these purchases.
Arranging loans
From the mid-nineteenth century onward, foreign loans became increasingly essential for the Qing’s war preparation. These loans were often used for payments and even served as prerequisites for purchasing foreign weapons. Similar to arms sales, wartime lending involved connections, collaborations, and competitions. However, a close analysis of how the Qing secured a loan during the Taiwan Incident shows that borrowing from foreign entities still encountered considerable opposition from domestic stakeholders. This reveals that the internationalized approach to war preparation was far from unanimously supported and that the Qing empire lacked a coherent plan. Nevertheless, foreign loans evolved into a staple of the Qing’s war preparations in the following decades.
Foreign loans facilitated war preparations in the 1870s. Shen Baozhen’s military purchases during the Taiwan Incident were connected to a foreign loan. The HSBC lent the Qing the so-called “Foochow Loan,” which was contracted on November 28.Footnote 88 Shen sought to take out the foreign loan in order to expedite large payments for arms sales and military activities in preparation for the imminent war.Footnote 89
The logic was related to the manner in which arms sales were made at this time. As Shen explained to top Fujian military and civil officials in late June or early July, buyers had to send a deposit when placing an order, and the remainder had to be paid once the goods arrived at the agreed-on port for delivery. There was no room to delay the payment. To further complicate the process, enquiries for available weapons often took an indefinite amount of time, but once they received a confirmation, interested buyers had to act promptly. For this reason, Shen considered a foreign loan as the solution to the lack of large and ready funds.Footnote 90
Furthermore, Shen opted for a foreign loan because he had exhausted the domestic financial resources at his disposal. In a letter to Fujian Governor-General Li Henian in July or August, Shen suggested that the foreign loans under discussion at that time be used as payments for the military purchases made by Prosper Giquel.Footnote 91 Ideally, Shen hoped that the loan could do away with the need for cash if the loan could be transferred directly from the lending party to the agents of the seller, most likely in Shanghai.
To make a case for the loan, Shen had to convince the court as well as his colleagues. As early as June 3, he had persuaded the top civil and military officials in Fujian to request permission from the court to take out a foreign loan.Footnote 92 The joint request, made by Shen, Governor-General of Fujian and Zhejiang Li Henian, and Wenyu, the General-in-Chief of Fuzhou, was approved in about ten days.Footnote 93 It should be emphasized that the domestic process of the proposed loan was far from completed: the permission granted consent to seek possible loans, not to accept them.
Although provincial authorities assisted with obtaining the court’s permission, Shen later complained about their indifference toward his plan, in particular, Governor-General Li Henian. Shen maintained that the information essential to taking out a loan was stored in the maritime customs office of Fujian and the provincial treasury, but officials there appeared to be unfamiliar with this matter, so much so that Shen himself copied out relevant documents for Governor-General Li’s information.Footnote 94 Moreover, to persuade Li, Shen contacted Wenyu, the top provincial military commander, for his help.Footnote 95 Shen also wrote to influential regional figures such as Lin Shoutu, a Fujian native who had managed the finances of the Qing’s military operations in the northwest years before.Footnote 96 Trusted by Wenyu, Lin at this time oversaw a military force and was responsible for inspecting the Foochow Navy Yard and the river mouth near the provincial seat.Footnote 97
These efforts seemed to work. Shen and top Fujianese authorities jointly informed the court of their borrowing plan on August 16, two months after receiving the court’s initial permission. The plan was to borrow two million silver taels from the HSBC. Critically, maritime customs in Fujian as well as other provinces would contribute their due shares to the repayment.Footnote 98 If obtained, the court’s approval could be read as redirecting to Shen funds currently outside Fujian’s reach.Footnote 99
As this financial proposal would certainly affect the finances of the central government and multiple provincial governments, Shen and his allies worked hard to weaken potential opposition. One of Shen’s close and strong allies was Li Hongzhang, who contacted influential regional administrators, such as Li Zongxi, the Commissioner of Trade for the Southern Ports, unequivocally expressed his support for Shen’s plan and praised Shen’s talent.
Thanks to such efforts, a mere day after Fujian’s joint proposal was sent out – it had probably not reached the imperial court yet – it had already been endorsed by the Zongli Yamen (then equivalent to the Qing’s Foreign Office). Significantly, the Zongli Yamen recommended that the court order the Ministry of Finance to secure Fujian’s urgent defense budgets, which would require the Ministry to contribute domestic resources. The court agreed.Footnote 100 Even though they had not received a response from the Ministry of Finance as of September 5, the Zongli Yamen proceeded to detail the portion of repayments that each provincial government was responsible for. Eleven governments were assigned a quota, ranging from 3,000 to 6,000 silver taels a year.Footnote 101
Fujian’s borrowing, unsurprisingly, attracted criticism from other provinces. In October, Shen refuted accusations of self-interest by underscoring the proposal’s benefits for the entire area of coastal China, not just Fujian.Footnote 102 Due to the financial obligations that accompany the loan, the loan was probably not favored even by Fujianese provincial officials, although they helped Shen make the request to the court. Therefore, after the likelihood of war with Japan decreased to some extent, the amount of the loan was reduced considerably. At some point, the borrowing seemed to have been abandoned altogether. In the end, the amount was reduced from six to two million silver taels. Who made the decision is uncertain, but Fujianese authorities must have played a critical role. From Shen’s perspective, Fujianese provincial authorities were not very supportive, even though they did assist with submitting the request to the court. Shen wrote to Governor-General Li to protest against the new amount. Months later, Li would harshly criticize Shen in all aspects and ask for Shen’s dismissal.
Similar to the military supplies Shen ordered, the loan entailed foreign connections. Shen, again, recommended Giquel to Li Henian. Giquel forwarded Shen a proposal for a loan at an 8 percent interest rate.Footnote 103 Against this backdrop, London bankers noticed Fujian’s attempts to secure funding as early as July 31. The amount of the potential loan was soon said to be several million taels.Footnote 104
In addition to soliciting financial and political support from Li Hongzhang, Shen soon realized that Robert Hart was essential to this borrowing.Footnote 105 Hart must, in some sense, “approve” the loan because foreign lenders considered the Qing’s customs revenues a reliable source of repayment and security. The North China Herald pointed out that the loan was secured by customs duty bonds.Footnote 106 For this reason, the Zongli Yamen forwarded Hart the draft contract of the Foochow Loan, and Hart offered a critical assessment of its terms and conditions in late September, noting, for instance, that he was concerned about the currency issue: “borrowing in China money to spend in Europe,” an arrangement that would result in unnecessary transaction fees.Footnote 107
In fact, Hart had been working on introducing his own loan to the Qing for some time. All this suggested that the Qing’s negotiations for a loan were not a concerted effort. Instead, several groups simultaneously interacted with different lending banks without much communication or cooperation with each other. Just as Shen signed a contract with the HSBC, Hart made a few inquiries about possible loans from the HSBC or the Oriental Bank, which he thought might offer better terms than Shen’s Foochow Loan. Through his long-distance secretary in London, Hart obtained a lending plan from the Oriental Bank.Footnote 108 He was serious about these inquiries and boasted access to Chinese and foreign intelligence alike. He knew well that Chinese authorities preferred short loans. The Oriental Bank did offer a revised version for Hart, but ultimately it was Shen’s deal that was sealed.
In addition to the HSBC and the Oriental Bank, others also competed to lend money to the Qing. One Shanghai correspondent of the London Times believed that an American firm was assisting the Qing in obtaining a three-million-dollar loan at nine percent interest secured by Maritimes Customs revenues.Footnote 109
The loan involved competing interests among Chinese officials and among foreign lenders. Concerned by the precedent that the Foochow loan would set, around September 17, the central government categorically prohibited other provinces from taking out loans for defense purposes. Taiwan’s defense borrowing was made an exception.Footnote 110 This stance was in response to the borrowing request made by Guangdong provincial authorities.
In retrospect, however, foreign lending became a common source of funding in the Qing’s final decades, whether in wartime or not, and much of this money was spent on weaponry. Between 1853 and 1912, the Qing took out a total of 155 foreign loans, including 16 before 1870, 5 in the 1870s, 20 in the 1880s, 21 in the 1890s, and 93 between 1900 and 1912. Of the 43 foreign loans contracted before the Sino-Japanese War, 31 were devoted to military purposes, including arms purchases, military operations, defense, indemnities, and soldiers’ pay and provisions. After the war, foreign loans were employed for a broader range of purposes, yet 23 out of 112 were still military-related. Indeed, with only one exception, all loans contracted prior to the 1880s were directed toward military purposes.Footnote 111 Foreign loans also continued to finance the purchase of Western weaponry in the late nineteenth century. For example, during the Sino-Japanese War, Inspector-General Robert Hart was informed by his secretary in London that loan agreements often required the borrower to purchase weapons at inflated prices and that loans could even be obtained directly from arms dealers.Footnote 112
Competing for limited resources
As foreign weapons and loans featured prominently in the Qing’s new mode of war preparation, the problem of competing for the same limited resources on the global market arose. In particular, during the Taiwan Incident – a conflict between two non-Western countries reliant on global resources – the Qing and Japan engaged in a zero-sum game for arms deals and loan applications.
Both the Qing and Japan were constrained by the availability of vessels for overseas military operations, and both looked to foreign vessels as a solution. Much as the Qing’s military mobilization was partly accomplished with foreign vessels, the very first batch of Japanese troops sent to Taiwan in 1874 were transported by a used steamship that Japan had just purchased from the British shipping company, the Peninsular and Oriental Steam Navigation Company.Footnote 113
It should be emphasized that both Asian states relied on European suppliers for their military resources. According to the intelligence gathered by Chinese agents in Japan, the country, after landing troops in Taiwan, continued to purchase gunboats, planned to order large quantities of armaments, and mobilized 60,000 troops equipped with foreign firearms.Footnote 114 The atmosphere was captured by a newspaper report, which described that “it is quite evident that the empire of Japan is at this moment one vast powder-magazine.”Footnote 115 Owing to the vigorous arms procurement efforts of Japan and China, Britain exported large quantities of European-manufactured arms to both countries during the Taiwan Incident.Footnote 116 Robert Hart suspected that some of the rifles supplied to China were in fact weapons that Japan had returned for failing quality standards.Footnote 117
In addition to weapons, the Qing and Japan competed for foreign capital through foreign firms or banks operating in East Asian treaty ports. For instance, the Oriental Bank lent $600,000 to Japan at the outset of the expedition but denied a second loan based on its risk assessments. This denial happened around early September 1874, at a time when the bank was considering lending money to the Qing.Footnote 118 In late September, the Oriental Bank was eager to seal the deal with the Qing, offering two loan proposals to Robert Hart. In fact, the two countries not only competed but also compared with one another. Since Japan had taken out a loan at an interest rate of 7 or 8 percent, Li Hongzhang considered that the Qing could likely be granted comparable terms.Footnote 119
Meanwhile, newspaper reports also compared the creditworthiness of the Qing and Japan, and it is likely that the assessments were not purely economic but also political. On September 28, according to a special correspondent of the China Mail, the Qing’s credit “is ten times better than that of Japan, and in modern warfare money will to a great extent carry the day.”Footnote 120 The appearance of this claim coincided with those of the Oriental Bank’s China loan proposals and the bank’s rejection of Japan’s further financial request.
Conclusion
The Taiwan Incident represented the moment at which the Qing’s internationalized approach to war preparation reached full maturity. To an unprecedented degree, the Qing was no longer entirely self-sufficient in the matter of arms or funds. Instead, the empire was now depending on global resources and engaged with individuals and institutions from different parts of the world. Access to both arms and funds became entangled with one another and preoccupied Qing officials.Footnote 121 This mode of war preparation would continue to shape Qing military operations in the last decades of the empire, despite efforts to build the domestic arms industry and limit foreign lending.Footnote 122
This mode of war preparation was characterized by coordination and competition. In terms of coordination, war preparation necessitated global operations, making personal connections that transcended national boundaries essential. Often, the flow of weapons or money across the world was facilitated by different actors at each stage of the process, making it similar to a relay. In this light, the safe delivery of bulk armaments was truly an achievement.
Competition occurred in various areas of war preparation: between buyers such as the Qing and Japan competing for weapons and loans on the global market; between sellers or brokers aiming to seal deals with Qing authorities; and between Qing officials vying for permission to secure loans or imported weapons for their jurisdictions. Instances of coordination and competition collectively demonstrate that war preparations during the Taiwan Incident were neither a centralized process nor a concerted effort.
The Qing empire’s relative success as a non-Western power during this era was due not only to domestic reforms aimed at self-strengthening but also to its strategic mobilization of global resources in service of national interests.Footnote 123 A telling indication is that a substantial share of global arms and capital was directed toward the defense of the Qing empire’s political peripheries. For instance, 53 percent of the total value of all foreign loans – amounting to forty-five million silver taels – borrowed between 1853 and 1890 were used to fund armed conflicts involving Qing frontiers or neighboring tributary states, such as Xinjiang, Taiwan, Vietnam, and Korea, as well as to suppress internal rebellions, including the Taiping War, that originated in frontier regions.Footnote 124 Although the Qing did not win every war, this internationalized strategy allowed it to retain control over most of its territory and avoid formal colonization.Footnote 125
Acknowledgements
I am grateful to the anonymous reviewers for their insightful and constructive comments. I also wish to acknowledge the valuable feedback provided by Steven B. Miles, the late Steven M. Goldstein, Dorinda (Dinda) Elliott, Harriet Wong, Chia-Hung Tsai, Yung-Ta Chien, Peng Hai, Chu-Shan Chiang, Kuo-Li Pi, Chao-Fang Chen, and W. Y. Chen in the early stages of this project. I acknowledge the use of OpenAI’s ChatGPT (https://chatgpt.com, GPT-4) for minor proofreading assistance. All substantive content is my own. This research was supported by the National Science and Technology Council, Taiwan (Grant No. 112-2410-H-003-180-MY2) and by National Taiwan Normal University.
Competing interests
The author declares no competing interests.
Nan-Hsu Chen is an assistant professor of history at National Taiwan Normal University. His current research examines the social history of military logistics in Taiwan and Qing China.
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