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A more stable gold standard monetary system can be one of the solutions used to help the economy. However, given the lack of gold during the Opium War and the shortage of silver, the Qing government was not able to import gold at the time. Even so, the stable gold standard is a good way to develop a strong economic foundation. However, the Qing government should have stabilized the silver price so as to prevent inflation and deprecation.
Lijin was a system of taxation during the Taiping Rebellion in Qing China. The Qing government used this in order to expand the military budget and to collect more in taxes from the people. It was a 1% tax and was levied on all commercial transactions. As the tax became more widely practiced throughout the country, the rate would tend to vary from one place to another. In one district, it would be one percent. In another district, it could be twenty percent. Regardless, the taxe rates as they existed helped the Qing government to collect money during hard times. At the same time, Xian Feng should have known that this would put negative pressure on economic development. When people have to pay more taxes, it actually ends up reducing the level of competition in the Chinese market. Because the Lijin policy is only designed for the Chinese goods and commercial activities, the beneficiary is the British and any other foreigners that dealt goods under unfair treaties. When the Qing government faced this financial difficulty, the issuing paper money made things even worse as it related to the financial deficit.
Another serious problem with the Qing officials of that way was corruption. In the western part of the country, there was corruption involving British officials. Those officials were able to earn extra money by serving multiple trade posts at the same time and thus they were able to collect money multiple times. "Since these extra salaries were limited by the statues, there were much smaller than Qing Officials in China." (Shawn Ni) A corrupt official could maximize the rents from the local farmers and also maximize the tax. Thus, this is a good model to address current problem. The Qing government should have strictly punished the corrupt officials and limited their power. Because of the financial crisis that occurred, the Xian Feng emperor should have reduced those officials' income and also cut the amount due from the taxpayers.
According to the theory...
The Xian Feng emperor should not have seen money as the
power of the ruler. Instead, the power should be focused on things like commodity circulation and valuation. In the western part of the country, it was commonly explained that economic theory should be based on "the theory of
wealth preservation, which maintains that money came into existence for the sake of preserving, measuring and exchanging wealth." (Zhang) For example, there totally different
economic system when comparing China and
Great Britain. The British assumed that "money must have content and value of metal and that its value is determined by the value of the metal." This is one of the most important elements in the
monetary policy.
Banking is the most important facet of broader economic policy. Banks are financial institutions that helps people to borrow and lend money. In ancient China,
banking was designed as Gui Fang. This existed for the people who want stored the valuable objects of the Tang dynasty. However, the Qing government could have had a real
financial institution that actively helped to stimulate the developing
economy that was in motion at the time. During hard economic times, it is hard to encourage people to make deposits as they prefer to save their money in their own cellars. However, people would be happy to borrow money from government. What government can do is lend money and charge them an interest rate while they
mortgage their property or use valuable objects as collateral. Beyond this shortcoming, China was not actively seeking trade with
foreign countries, for the most part. When they did seek any sort of trade, it was typically with officials or nobles only. In other words, the middle and bottom class of people were not usually involved. Instead, the government should have encouraged all people to make deposits and apply for loans. In addition to charging interest for loans, the Chinese government could have given interest to the people who made deposits. The government could in turn use the despoits on file to improve agricultural technology. Given the several inner
rebellions in…
