Raising Capital

Capital plays an important role in the development of modern enterprises. The Westernization Movement required great capital to train the army, build ships, and manufacture tools, etc. However, China was in a period of social transformation and faced a shortage of funds; thus, how could it provide money for modern enterprises? According to Zhang Zhidong, “To gain more money, one should first invest,” as “spending money usually comes before managing it.” In general, the Westernization Movement carried out a series of reforms to supplement the capital. To rectify the traditional tax system, the Westernization Movement focused on two aspects: feudal land tax and salt tax. To ensure the sustainable development of the economy, it is suggested that the authority levy new tax categories (tariffs and likin (lijin) tax). As Western countries were concerned about searching for profitable fields of investment, it created the condition for the Westernization Group to use foreign capital.