United States, to adjust difficulties with Japan, entered into the Lansing-Ishii Agreement, which recognized that because of “territorial propinquity . . .

Japan has special interests in China.” This treaty seemed to underwrite Japan’s wartime gains.

Important economic and social changes occurred during the first years of the republic. With the outbreak of the war, foreign economic competition with native industry abated, and nativeowned light industries developed markedly. By 1918 the industrial labour force numbered some 1,750,000. Modernstyle Chinese banks increased in number and expanded their capital.

Intellectual Movements

A new intelligentsia had also emerged. The educational reforms and the ending of the governmental examination system during the final Qing years enabled thousands of young people to study sciences, engineering, medicine, law, economics, education, and military skills in Japan. Others went to Europe and the United States. Upon their return they took important positions and were a modernizing force in society. Their writing and teaching became a powerful influence on upcoming generations of students. In 1915–16 there were said to be nearly 130,000 new-style schools in China with more than four million students. This was mainly an urban phenomenon, however; rural life was barely affected except for what may have been gradually increasing

tenancy and a slow impoverishment that sent rural unemployed into cities and armies or into banditry.

An Intellectual Revolution

An intellectual revolution took place during the first decade of the republic, sometimes referred to as the New Culture Movement. It was led by many of the new intellectuals, who held up for critical scrutiny nearly all aspects of Chinese culture and traditional ethics. Guided by concepts of individual liberty and equality, a scientific spirit of inquiry, and a pragmatic approach to the nation’s problems, they sought a much more profound reform of China’s institutions than had resulted from self-strengthening or the republican revolution. They directed their efforts particularly to China’s educated youth.

In September 1915 Chen Duxiu (Ch’en Tu-hsiu), who had studied in Japan and France, founded Xinqingnian (“New Youth”) magazine to oppose Yuan’s imperial ambitions and to regenerate the country’s youth. This quickly became the most popular reform journal, and in 1917 it began to express the iconoclasm of new faculty members at Peking University (Beida), which Chen had joined as dean of the College of Letters. Peking University, China’s most prestigious institution of higher education, was being transformed by its new chancellor, Cai Yuanpei (Ts’ai Yüan-p’ei), who had spent many years in advanced study in Germany. Cai made the university a