ABSTRACT
The early twentieth century witnessed a world of change rooted in the context of two conflicting economic doctrines; the laissez-faire system contrasted directly with state interventionism. Identifying phases of change in the Chinese economy, according to the nature of the foreign presence, offers a convenient framework to locate both the international and Chinese contexts where the modern Chinese economy developed. The most prominent and early advocate of free trade, Adam Smith, also viewed economic power as an instrument of statecraft. During the eighteenth century, royal trading companies were chartered as a way to achieve economic dominance in overseas empires; examples include the Dutch East India Company and the Emden Company of Prussia. Chinese government officials held different views on trade expansion or agricultural protection, the xinzheng reform, when implemented at the regional level after 1901, established new rules for resource allocation while broadening the scope of government control over mercantile and financing activities.
