The stone tools and fossils of Homo erectus found in N and central China are the earliest discovered protohuman remains in NE Asia; some of the tools date to more than 1.3 million years ago. About 20,000 years ago, after the last glacial period, modern humans appeared in the Ordos desert region. The subsequent culture shows marked similarity to that of the higher civilizations of Mesopotamia, and some scholars argue a Western origin for Chinese civilization. However, since the 2d millennium B.C. a unique and fairly uniform culture has spread over almost all of China. The substantial linguistic and ethnological diversity of the south and the far west result from their having been infrequently under the control of central government.
China's history is traditionally viewed as a continuous development with certain repetitive tendencies, as described in the following general pattern: The area under political control tends to expand from the eastern Huang He and Chang (Yangtze) basins, the heart of Chinese culture, and then, under outside military pressure, to shrink back. Conquering barbarians from the north and the west supplant native dynasties, take over Chinese culture, lose their vigor, and are expelled in a surge of national feeling. Following a disordered and anarchic period a new dynasty may arise. Its predecessor, by engaging in excessive warfare, tolerating corruption, and failing to keep up public works, has forfeited the right to rule—in the traditional view, the dynasty has lost "the mandate of Heaven." The administrators change, central authority is reestablished, public works constructed, taxation modified and equalized, and land redistributed. After a prosperous period disintegration reappears, inviting barbarian intervention or native revolt.
Although traditionally supposed to have been preceded by the semilegendary Hsia dynasty, the Shang dynasty (c.1523–1027 B.C.) is the first in documented Chinese history (see the table entitled Chinese Dynasties). During the succeeding, often turbulent, Chou dynasty (c.1027–256 B.C.), Confucius, Lao Tzu, and Mencius lived, and the literature that until recently formed the basis of Chinese education was written. The use of iron was the main material advance. The semibarbarous Ch'in dynasty (221–206 B.C.) first established the centralized imperial system that was to govern China during stable periods. The Great Wall was begun in this period. The native Han dynasty period (202 B.C.–A.D. 220), traditionally deemed China's imperial age, is notable for long peaceable rule, expansionist policies, and great artistic achievement.
The Three Kingdoms period (A.D. 220–65) opened four centuries of warfare among petty states and of invasions of the north by the barbarian Hsiung-nu. In this inauspicious time China experienced rapid cultural development. Buddhism, which had earlier entered from India, and Taoism, a native cult, grew and seriously endangered Confucianism. Indian advances in medicine, mathematics, astronomy, and architecture were adopted. Art, particularly figure painting and decoration of Buddhist grottoes, flourished. Feudalism partly revived under the Tsin dynasty (265–420) with the decay of central authority.
Under the Sui (581–618) and the T'ang (618–907) a vast domain, much of which had first been assimilated to Chinese culture in the preceding period, was unified. The civil service examination system based on the Chinese classics and a renaissance of Confucianism were important developments of this brilliant era. Its fresh and vigorous poetry is especially noted. The end of the T'ang was marked by a withdrawal from conquered border regions to the center of Chinese culture.
The period of the Five Dynasties and the Ten Kingdoms (907–60), which was a time of chaotic social change, was followed by the Sung dynasty (960–1279), a time of scholarly studies and artistic progress, marked by authentication of the Confucian literary canon and the improvement of printing techniques through the invention of movable type. The poetry of the Sung period was derivative, but a new popular literary form, the novel, appeared at that time. Neo-Confucianism developed systematically. Gunpowder was first used for military purposes in this period.
While the Sung ruled central China, barbarians—the Khitai, the Jurchen, and the Tangut—created northern empires that were swept away by the Mongols under Jenghiz Khan. His grandson Kublai Khan, founder of the Yüan dynasty (1271–1368), retained Chinese institutions. The great realm of Kublai was described in all its richness by one of the most celebrated of all travelers, Marco Polo. Improved roads and canals were the dynasty's main contributions to China.
The Ming dynasty (1368–1644) set out to restore Chinese culture by a study of Sung life. Its initial territorial expansion was largely lost by the early 15th cent. European trade and European infiltration began with Portuguese settlement of Macao in 1557 but immediately ran into official Chinese antiforeign policy. Meanwhile the Manchu peoples advanced steadily south in the 16th and the 17th cent. and ended with complete conquest of China by 1644 and with establishment of the Ch'ing (Manchu) dynasty (1644–1912). Under emperors K'ang-hsi (reigned 1662–1722) and Ch'ien-lung (reigned 1735–96), China was perhaps at its greatest territorial extent.
The Ch'ing opposition to foreign trade, at first even more severe than that of the Ming, relaxed ultimately, and in 1834, Guangzhou was opened to limited overseas trade. Great Britain, dissatisfied with trade arrangements, provoked the Opium War (1839–42), obtained commercial concessions, and established extraterritoriality. Soon France, Germany, and Russia successfully put forward similar demands. The Ch'ing regime, already weakened by internal problems, was further enfeebled by European intervention, the devastating Taiping Rebellion (1848–65), and Japan's military success in 1894–95 (see Sino-Japanese War, First). Great Britain and the United States promoted the Open Door Policy—that all nations enjoy equal access to China's trade; this was generally ignored by the foreign powers, and China was divided into separate zones of influence. Chinese resentment of foreigners grew, and the Boxer Uprising (1900), encouraged by Empress Tz'u Hsi, was a last desperate effort to suppress foreign influence.
Belated domestic reforms failed to stem a revolution long-plotted, chiefly by Sun Yat-sen, and set off in 1911 after the explosion of a bomb at Wuchang. With relatively few casualties, the Ch'ing dynasty was overthrown and a republic was established. Sun, the first president, resigned early in 1912 in favor of Yüan Shih-kai, who commanded the military power. Yüan established a repressive rule, which led Sun's followers to revolt sporadically.
Early in World War I, Japan seized the German leasehold in Shandong prov. and presented China with Twenty-one Demands, designed to make all of China a virtual Japanese protectorate. China was forced to accept a modified version of the Demands, although the treaties were never ratified by the Chinese legislature. China entered World War I on the Allied side in 1917, but at the Versailles peace conference was unable to prevent Japan from being awarded the Shandong territory. Reaction to this provision in the Versailles treaty led to Nationalist flare-ups and the May Fourth Movement of 1919. At the Washington Conference (1921–22), Japan finally agreed to withdraw its troops from Shandong and restore full sovereignty to China. The Nine-Power Treaty, signed at the Conference, guaranteed China's territorial integrity and the Open Door Policy.
Yüan had died in 1916 and China was disintegrating into rival warlord states. Civil war raged between Sun's new revolutionary party, the Kuomintang, which established a government in Guangzhou and received the support of the southern provinces, and the national government in Beijing, supported by warlords (semi-independent military commanders) in the north. As cultural ferment seethed throughout China, intellectuals sought inspiration in Western ideals; Hu Shih, prominent in the burgeoning literary renaissance, began a movement to simplify the Chinese written language. Labor agitation, especially against foreign-owned companies, became more common, and resentment against Western religious ideas grew.
In 1921, the Chinese Communist party (see Communist party, in China) was founded. Failing to get assistance from the Western countries, Sun made an alliance with the Communists and sought aid from the USSR. In 1926, Chiang Kai-shek led the army of the Kuomintang northward to victory. Chiang reversed Sun's policy of cooperation with the Communists and executed many of their leaders. Thus began the long civil war between the Kuomintang and the Communists. Chiang established (1928) a government in Nanjing and obtained foreign recognition.
A Communist government was set up in the early 1930s in Jiangxi, but Chiang's continued military campaigns forced (1934) them on the long march to the northwest, where they settled in Shaanxi. Japan, taking advantage of China's dissension, occupied Manchuria in 1931 and established (1932) the puppet state of Manchukuo (see Sino-Japanese War, Second). While Japan moved southward from Manchuria, Chiang chose to campaign against the Communists. In the "Xi'an Incident" (Dec., 1936), Chiang was kidnapped by Nationalist troops from Manchuria and held until he agreed to accept Communist cooperation in the fight against Japan.
In July, 1937, the Japanese attacked and invaded China proper. By 1940, N China, the coastal areas, and the Chang (Yangtze) valley were all under Japanese occupation, administered by the puppet regime of Wang Ching-wei. The capital was moved inland to Chongqing. After 1938, Chiang resumed his military harassment of the Communists, who were an effective fighting force against the Japanese. With Japan's attack (1941) on U.S. and British bases and the onset of World War II in Asia, China received U.S. and British aid. The country was much weakened at the war's close.
The end of the Japanese threat and the abolition of extraterritoriality did not bring peace to the country. The hostility between the Chinese Nationalists and the Communists flared into full-scale war as both raced to occupy the territories evacuated by the Japanese. The United States, alarmed at the prospect of a Communist success in China, arranged through ambassadors Patrick J. Hurley and George C. Marshall for conferences between Chiang and the Communist leader Mao Zedong, but these proved unsuccessful.
When the Russians withdrew from Manchuria, which they had occupied in accordance with agreements reached at the Yalta Conference, they turned the Japanese military equipment in that area over to the Chinese Communists, giving them a strong foothold in what was then the industrial core of China. Complete Communist control of Manchuria was realized with the capture of Shenyang (Mukden) in Nov., 1948. Elsewhere in the country, Chiang's Nationalists, supplied by U.S. arms, were generally successful until 1947, when the Communists gained the upper hand.
Sweeping inflation, increased police repression, and continual famine weakened public confidence in the Nationalist government, and much of the population came to at least passively support the Communists. Beijing fell to the Communists without a fight in Jan., 1949, followed (Apr.–Nov., 1949) by the major cities of Nanjing, Hankou, Shanghai, Guangzhou, and Chongqing. In Aug., 1949, when little Nationalist resistance remained, the U.S. Dept. of State announced that no further aid would be given to Chiang's government. The Communists, from their capital at Beijing, proclaimed a central people's government on Oct. 1, 1949. The seat of the Nationalist government was moved to Taiwan in Dec., 1949.
The new Communist government was immediately recognized by the USSR and shortly thereafter by Great Britain, India, and other nations. Recognition was, however, refused by the United States, which maintained close ties with Taiwan. By Apr., 1950, the last pockets of Nationalist resistance were cleaned out, and all of mainland China was secure for the Communists.
Mao Zedong and the Communists brought the soaring inflation under control and effected a more equitable distribution of food. A land-reform program was launched, and police control was tightened. During the first five-year plan (1953–57), agriculture was collectivized and industry was nationalized. With assistance from the USSR, construction of many modern large-scale plants was begun, and railroads were built to link the new industrial complexes of the north and northwest. On the international scene, Chinese Communist troops took possession of Tibet in Oct., 1950. That same month Chinese forces intervened in the Korean War to meet a drive by United Nations forces toward the Manchurian border. Large-scale Chinese participation in the war persisted until the armistice of July, 1953, after which China emerged as a diplomatic power in Asia. Zhou Enlai became internationally known through his role at the Geneva Conference of 1954 and at the Bandung Conference of 1955.
The Great Leap Forward, an economic program aimed at making China a major industrial power overnight, was underway by 1958. It featured the expansion of cooperatives into communes, which disrupted family life but offered a maximum use of the labor force. The industrialization program was pushed too fast, resulting in the overproduction of inferior goods and the deterioration of the industrial plant. At the same time, agriculture was neglected. Many scholars have said that this neglect, rather than poor weather conditions as asserted by the government, caused the three successive crop failures of 1959–61; the widespread famine that resulted was responsible for from 15 million to as many as 55 million deaths.
A severe blow to the economy and political system was the termination of Soviet aid in 1960 and the withdrawal of Soviet technicians and advisers—events that revealed a growing ideological rift between China and the USSR. The rift, which began with the institution of a destalinization policy by the Soviets in 1956, widened considerably after the USSR adopted a more conciliatory approach toward the West in the cold war. There were massive military buildups along the USSR-Chinese border, and border clashes erupted in Manchuria and Xinjiang.
Hostility had continued meanwhile between Communist China and the Nationalist government of Chiang Kai-shek, who pledged himself to the reconquest of the mainland. The Communist government insisted upon its right to Taiwan, but the United States made clear its intention to defend that island against direct attack, having even given (1955) a qualified promise to defend the Nationalist-held offshore islands of Quemoy and Matsu as well. China's relations with other Asian nations, at first cordial, were affected by China's encouragement of Communist activity within their borders, the suppression of a revolt in Tibet (1959–60), and undeclared border wars with India in the 1960s over disputed territory. In the Vietnam War, China provided supplies, armaments, and technical assistance as well as militant verbal support to North Vietnam.
In the late 1960s and early 1970s the emphasis of China's foreign policy changed from revolutionary to diplomatic; new contacts were established, and efforts were made to improve relations with many governments. China continued to strengthen its influence with other underdeveloped nations, extending considerable economic aid to countries in South America, Africa, and Asia. Important steps in Chinese progression toward recognition as a world power were the successful explosions of China's first atomic bomb (1964) and of its first hydrogen bomb (1967), and the launching of its first satellite (1970).
Internal dissension and power struggles were revealed in such domestic crises as the momentous Cultural Revolution (1966–76); the death (1971) in an airplane crash of defense minister Lin Biao while he was allegedly fleeing to the Soviet Union after an abortive attempt to assassinate Mao and establish a military dictatorship; and a major propaganda campaign launched in 1973, which mobilized the masses against such widely ranging objects of attack as Lin Biao, the teachings of Confucius, and cultural exchanges with the West.
Economically, the emphasis in the 1960s and early 1970s was on agriculture. After the Cultural Revolution, economic programs were initiated featuring the establishment of many small factories in the countryside and stressing local self-sufficiency. Both industrial and agricultural production records were set in 1970, and, despite serious droughts in some areas in 1972, output continued to increase steadily.
In 1971 long-standing objections to the admission of the People's Republic of China to the United Nations were set aside by the United States; that October, Communist delegates were seated as the representatives of all China and, despite the opposition of the United States, which favored a "two-China" membership, the Nationalist delegation was expelled. A breakthrough in the hostile relations between the United States and Communist China came with the visit of President Richard M. Nixon to Beijing in Feb., 1972. Although U.S. support of Taiwan remained a sensitive issue, the visit resulted in a joint agreement to work toward peace in Asia and to develop closer economic, cultural, and diplomatic ties.
Although Mao had resigned his position as chairman of the People's Republic during the failures of the Great Leap Forward, as chairman of the central committee of the Communist party he remained the most powerful political figure in China. (Liu Shaoqi, who succeeded Mao as chairman of the Republic in 1959, was deposed during the Cultural Revolution.) By the mid-1970s, political power was balanced between the moderates, led by Deng Xiaoping and Premier Zhou Enlai, and the more radical heirs to the Cultural Revolution, led by the Gang of Four, which included Jiang Qing (Mao's wife), Wang Hongwen, Yao Wenyuan, and Zhang Chunqiao. Mao mediated between the two factions.
With the death of Zhou in Jan., 1976, the Gang of Four convinced Mao that Deng's economic plan, the Four Modernizations, would overturn the legacy of Mao's Cultural Revolution. Deng was purged in April, along with many of his supporters, as the Gang of Four consolidated their power. After Mao's death in Sept., 1976, however, a coalition of political and military leaders purged the Gang of Four, and Hua Guofeng, who had succeeded Zhou as premier, became party chairman. Deng was rehabilitated in 1977 and soon was recognized as the most powerful party member, although he was nominally deputy chairman to Hua. In 1980, Hua stepped down from the premiership in favor of Zhao Ziyang, who was Deng's choice.
From 1977, Deng worked toward his two main objectives, to modernize and strengthen the economy and to forge closer political ties with Western nations. To this end, four coastal cities were named (1979) special economic zones in order to draw foreign investment, trade, and technology. Fourteen more cities were similarly designated in 1984. China also decollectivized its cooperative farms, which led to a dramatic increase in agricultural production. In order to control population growth, the government instituted a law limiting families to one child, but protests and widespread infanticide forced the government to moderate its policy somewhat.
The People's Republic of China reached a political milestone when formal diplomatic relations were established with the United States on Jan. 1, 1979. In 1980, the People's Republic took Taiwan's place in the International Monetary Fund and the World Bank. China had a brief border war with Vietnam in 1979 over Vietnam's invasion of Cambodia, but China has generally been able to maintain peaceful foreign relations in order to advance its domestic agenda.
In the early 1980s, China reorganized the structure of the government and the CCP, rehabilitating many people purged in the Cultural Revolution and emphasizing the maintenance of discipline, loyalty, and spiritual purity in the face of increasing international contact. Declaring a policy of "One Country, Two Systems," China reached agreements with both Great Britain (1984) and Portugal (1987) to return to Chinese sovereignty the territories of Hong Kong (in 1997) and Macao (in 1999). In 1987, following a series of student demonstrations, Hu Yaobang, a reformist who had been named general secretary in 1980, was replaced by Zhao Ziyang, who was in turn replaced as premier by Li Peng.
The death of Hu in Apr., 1989, led to the series of protests that culminated in the violent military suppression at Tiananmen Square. The government arrested thousands of suspected dissidents and replaced Zhao, who favored negotiating with the protesters, as Communist party secretary with Jiang Zemin, who became China's president in 1993. The incident brought on international economic sanctions, which sent China's economy into decline. International trade gradually resumed during the course of the next year, and in June, 1990, after China released several hundred dissidents, the United States renewed China's most-favored-nation trade status.
In the wake of the Tiananmen Square massacre, China sought to avoid sharp political conflict with the West, as by supporting the United Nations coalition in the Persian Gulf War, but tensions continued over such issues as Taiwan. In 1995, in reaction to a U.S. visit by Taiwan's president, Lee Teng-hui, Beijing conducted missile tests in the Taiwan Strait, and in early 1996 China conducted military exercises and missile tests close to the shores of Taiwan, in an attempt to inhibit those voting in the Taiwanese presidential election. Although it released some dissidents, the regime continued to clamp down on dissent; examples of its hard line were the long sentences given out to human-rights activist Wei Jingsheng in 1995 and political activists Xu Wenli and Qin Yongmin in 1998. In July, 1999, the Chinese government outlawed the Falun Gong (Buddhist Law) spiritual movement after a group of several thousand rallied to urge the sect's official recognition. Official corruption, economic, social, and ethnic inequality, and oppressive rural taxes sparked an increasing number of public protests beginning in the late 1990s.
Economic change continued, with the encouragement of Deng Xiaoping, and in 1993 a revision of China's constitution called for the development of a "socialist market economy" in which the Communist party would retain political power while encouraging a free market economy. Deng died in 1997, and Zhu Rongji replaced Li Peng as prime minister in 1998. Floods inundated the Chang (Yangtze) River valley in Aug., 1998, killing over 2,000 people and leaving millions homeless.
In May, 1999, during the Kosovo crisis, the Chinese embassy in Belgrade was mistakenly bombed by NATO, unleashing large anti-American demonstrations in Beijing. In the same month, China was accused by the United States of stealing nuclear design secrets that enabled it to substantially accelerate its weapons program. Nonetheless, a trade agreement was signed in November with the United States that led to Chinese membership (2001) in the World Trade Organization. Also in November, China advanced its space program with the test launching of an unmanned space capsule.
Relations with the United States again became tense in Apr., 2001, after a Chinese fighter and U.S. surveillance plane collided in mid-air, killing the Chinese pilot. Three months later Russia and China signed a friendship and cooperation treaty that seemed in part a response to the G. W. Bush administration's arms sales to Taiwan and push to develop a ballistic missile defense system.
Beginning in 2001 the Chinese Commmunist party began yet another transition, both in its membership and leadership. That year, Jiang Zemin urged the party to recruit business people as members, declaring in the doctrine of the "three represents" that the party must represent capitalists in addition to workers and peasants. The following year, Jiang resigned as party leader and was replaced by Hu Jintao. Hu replaced Jiang as president in 2003, and Wen Jiabao became prime minister. Jiang remained extremely influential, however, in both the party and the government, and retained his chairmanship of the powerful national and party military commissions until Sept., 2004.
The government's handling in 2003 of an outbreak of SARS (severe acute respiratory syndrome) that began in S China harmed the nation's international image when the outbreak went unreported (and then underreported), enabling it to spread more readily. Severe measures instituted subsequently to curb the illness hurt the service sector of the economy, but by the end 2003 China had experienced a robust growth rate of more than 9% and a major urban building boom, resulting in part from the migration of rural inhabitants to the cities (22 cities had more than 2 million residents). In 2003, China and India signed a border pact that represented an incremental improvement in their relations, and two years later a new agreement called for the settlement of border issues between the two nations. Also in 2003 a trade pact giving Hong Kong businesses greater access to China's markets also was signed. In Oct., 2003, China became the third nation to put an astronaut into orbit when Shenzhou 5, carrying Yang Liwei, was launched; ten years later
Continuing vigorous economic growth in 2004 led the government to put in place a series of measures designed to slow growth to control inflation and reduce overinvestment. Also in 2004, relations with Taiwan become more strained with the reelection of Chen Shui-bian, who had previously called for Taiwan to declare formal independence from China, as the island's president. In Mar., 2005, China passed an antisecession law that called for the use of force if peaceful means failed to bring about reunification with Taiwan; the law sparked protests in Taiwan. At the same time, China welcomed visits from Taiwanese opposition leaders, who pledged to follow less confrontational approaches to relations with the mainland.
Early 2005 also saw increased tensions with Japan over how Japanese actions during World War II were treated in Japanese textbooks, over the possible appointment of Japan to a permanent UN Security Council seat, and over a disputed exclusive economic zone in the East China Sea. The issues sparked sometimes destructive demonstrations in China. Meanwhile, in Nov., 2004, China signed a free-trade agreement with the Association of Southeast Asian Nations (ASEAN); under the accord, tariffs on many goods will be eliminated with the richer ASEAN members by 2010 and with the rest by 2015. Trade was also an issue with the United States, which called in early 2005 (and subsequently) for China to revalue its currency because of its large trade imbalances with China, whose economy continued its booming growth during into the following year. The tensions with Taiwan and Japan also continued into 2006, and the government became increasingly concerned with the disparity between richer urban and poorer rural China, which had become even more marked since the turn of the century and sparked a growing number of sometimes violent demonstrations. Shanghai's local Communist party leader, who was also a member of the politburo, was dismissed in Sept., 2006, for corruption, but the move was largely seen as a consolidation of power by President Hu rather than a concerted attempt to weed out corrupt officials.
North Korea's test of a nuclear weapon in Oct., 2006, highlighted China's complex relations with its northeastern neighbor. Although China is widely regarded as having more influence than any other nation with North Korea and objected to the test, it was unable to prevent it. Concerned about instability on the Korean peninsula and a potential influx of Korean refugees into NE China, China supported a resolution condemning North Korea and imposing sanctions but expressed reservations about searching North Korean ships and other trade traffic. China did, however, pressure the North to back down on conducting a second nuclear test.
Trade relations with the United States again became problematic in 2007. Following extremely strong economic growth in 2006, which contributed to China huge trade surplus and foreign currency reserves, the United States, under growing domestic pressure, instituted tariffs on some Chinese goods, asserting that the goods were illegally subsidized. China denounced the move, which appeared in part to have been made because of China's reluctance to revalue its currency more quickly. In May, 2007, China announced it would ease restrictions a little on the daily fluctuation of its currency, a largely symbolic move. Relations with the United States were also complicated by a successful Chinese antisatellite weapon test (Jan., 2007), which suggested that China might cripple U.S. navigation and communication satellites if the Americans aided Taiwan in the event of a Chinese-Taiwanese war. Inflation became an increasing problem during 2007 in the fast-growing Chinese economy, despite Chinese measures to control it, and China's trade surplus continued to grow (by almost 50% in 2007).
In Jan.–Feb., 2008, some of the harshest winter weather in a century caused hardships in central and E China, and severely stressed China's transportation and energy systems, leading to some industry slowdowns and stranding millions of Chinese New Year travelers. More than 300,000 troops and 1.1 million auxiliary forces were mobilized to clear roads, deliver supplies, and the like. In Mar., 2008, there were anti-Chinese protests and riots in Tibet, and Tibetans elsewhere in China, especially in neighboring provinces, also demonstrated against Chinese rule. The Tibetan protests also led international supporters of Tibetan autonomy or independence to use world events associated with the 2008 Beijing summer Olympics to demonstrate against Chinese rule in Tibet. In April, President Hu met briefly with Taiwan's vice president–elect; the highest ranking meeting with the Taiwanese since the Communist revolution, it signaled the likelihood of much less confrontational relations with the newly elected Kuomintang government of Taiwan. Regular commercial air service between China and Taiwan began three months later.
A devastating earthquake struck SW China in May. Centered on N central Sichuan prov., it killed at least 69,000 persons, many of whom died when substandard new buildings, including a number of schools, collapsed. Some 18,000 people were listed as missing, and more than 374,000 were injured. The disaster was notable for the largely uncensored media coverage it initially received in China, but after several weeks coverage was limited and public displays of mourning were suppressed by the police. In July, 2008, China and Russia signed an agreement that finalized the demarcation of their shared borders; the pact was the last in a series of border agreements (1991, 1994, and 2004).
In Sept., 2008, in response to signs that economic growth in China was slowing during the global financial downturn, the government reversed a five-year monetary-tightening policy intended to fight inflation and abruptly cut interest rates while also easing lending restrictions on Chinese banks. That same month a series of product contamination scandals (2007–8) involving pet-food ingredients, toys, and other products produced by Chinese companies culminated in a powdered-milk adulteration case that sickened more than 50,000 Chinese infants and affected both domestic and exported products and led many nations to ban or restrict imports of Chinese food products containing milk.
In a marked improvement in relations, China and Taiwan in November signed agreements that would increase direct trade and transportation between them; additional agreements have since been signed, leading to a landmark trade accord in June, 2010. Also in Nov., 2008, the Chinese government announced a major economic stimulus package, including infrastructure investments, in response to the global financial crisis and economic downturn that began in 2008 and slowed the growth rate of the export-driven Chinese economy. That helped reverse the slowdown significantly as 2009 progressed, and the economy grew by 8.7%, with growth surging higher (10.3%) in 2010. Continuing export growth revived international concerns about the undervaluation of China's currency. China also used its enormous foreign reserves (more than $2 trillion) to provide international economic aid and increase its international influence. By mid-2010 robust growth led the government to impose restrictions on property sales in an attempt to prevent a speculative bubble, and interest rates and bank-reserves requirements were increased during the year. Meanwhile, in July, 2009, a Uigur protest in Ürümqi, Xinjiang, led to deadly anti-Chinese rioting and then anti-Uigur rioting by Chinese; hundreds were arrested, and the government sent troops into the city to reestablish control there. Xinjiang continued to be the site of recurring ethnic unrest in subsequent years.
China's extensive offshore territorial claims have become an increasing source of conflict in the region since 2010. In Sept., 2010, after a Chinese trawler collided with Japanese patrol boats near the Senkaku Islands, an island group controlled by Japan but claimed by China, Japan accused the captain of intentionally crashing into the Japanese vessels. When he was not released when his ship and crew was, China demanded his release, canceled high-level intergovernmental meetings with Japan, and was reported to have halted the export of industrially important rare earths to Japan (and later to other Western nations). The captain subsequently was released, but the events strained relations between the two nations. China's increasingly influential and assertive foreign policy, to a large degree a natural outgrowth of its economic power, also complicated relations with other Asian neighbors, especially when disputed islands (and the potential surrounding resources) were involved. Chinese claims to the entire South China Sea led to tensions with Vietnam and the Philippines in 2011 and 2012, and its claim to the Senkakus led to renewed tensions with Japan in 2012, including sometimes violent anti-Japanese demonstrations in China and a significant reduction in purchases in Japanese products.
In Oct., 2010, Vice President Xi Jinping was appointed vice chairman of the powerful party and government military commissions, a move regarded as signaling his likely appointment as Hu Jintao's successor. A 2011 World Trade Organization decision that China had violated trade rules in a 2009 case by restricting sales of magnesium and other raw materials led to renewed criticism of China's quotas on rare earths. The Chinese government continued its efforts to battle inflation during 2011, but slower growth in the latter half of the year led to the easing of some of those efforts at the end of 2011; growth slowed further in 2012 and 2013.
China's most significant political conflict and scandal in many years erupted in early 2012. Bo Xilai, the ambitious and charismatic Chongqing party boss who was known as anticorruption crusader as well as a neo-leftist populist not of the more businesslike mold characteristic of Chinese leaders, was removed as the municipality's party leader after his deputy fled to the U.S. consulate in February. The incident was followed by accusations of corruption and abuse of power involving Bo and his family. By April Bo had also lost his party politburo and central committee posts; Bo, his wife, and his deputy were subsequently convicted (2012–3) of various charges.
Xi Jinping succeeded Hu Jintao as Communist party leader in Nov., 2012. Xi became Chinese president in Mar., 2013; at the same time, Li Keqiang succeeded Wen Jiabao as premier. Chinese assertion (Nov., 2013) of an air defense zone that encompassed the Senkakus and an area claimed by South Korea was criticized by the United States, Japan, South Korea, and Taiwan. In Jan., 2014, Hainan province announced new fishing rules for the 60% of the South China Sea claimed by China (a claim not recognized by China's neighbors and other countries); the United States criticized the move as provocative, and other nations also denounced it.