n-kuo fang-lueeh_ ("Plans for the
Building up of the Realm"). The three phases of development through
which republican China was to pass were: the phase of struggle against
the old system, the phase of educative rule, and the phase of truly
democratic government. The phase of educative rule was to be a sort of
authoritarian system with a democratic content, under which the people
should be familiarized with democracy and enabled to grow politically
ripe for true democracy.

Difficult as was the internal situation from the social point of view,
it was no less difficult in economic respects. China had recognized that
she must at least adopt Western technical and industrial progress in
order to continue to exist as an independent state. But the building up
of industry demanded large sums of money. The existing Chinese banks
were quite incapable of providing the capital needed; but the acceptance
of capital from abroad led at once, every time, to further political
capitulations. The gentry, who had no cash worth mention, were violently
opposed to the capitalization of their properties, and were in favour of
continuing as far as possible to work the soil in the old style. Quite
apart from all this, all over the country there were generals who had
come from the ranks of the gentry, and who collected the whole of the
financial resources of their region for the support of their private
armies. Investors had little confidence in the republican government so
long as they could not tell whether the government would decide in
favour of its right or of its left wing.

No less complicated was the intellectual situation at this time.
Confucianism, and the whole of the old culture and morality bound up
with it, was unacceptable to the middle-class element. In the first
place, Confucianism rejected the principle, required at least in theory
by the middle class, of the equality of all people; secondly, the
Confucian great-family system was irreconcilable with middle-class
individualism, quite apart from the fact that the Confucian form of
state could only be a monarchy. Every attempt to bolster up Confucianism
in practice or theory was bound to fail and did fail. Even the gentry
could scarcely offer any real defence of the Confucian system any
longer. With Confucianism went the moral standards especially of the
upper classes of society. Taoism was out of the question as a
substitute, because of its anarchistic and egocentric character.