At the end of the first world war the foreign powers revised their attitude towards China.  The idea of territorial partitioning of the country was replaced by an attempt at financial exploitation; military friction between the Western powers and Japan was in this way to be minimized.  Financial control was to be exercised by an international banking consortium (1920).  It was necessary for political reasons that this committee should be joined by Japan.  After her Twenty-one Demands, however, Japan was hated throughout China.  During the world war she had given loans to the various governments and rebels, and in this way had secured one privilege after another.  Consequently China declined the banking consortium.  She tried to secure capital from her own resources; but in the existing political situation and the acute economic depression internal loans had no success.

In an agreement between the United States and Japan in 1917, the United States, in consequence of the war, had to give their assent to special rights for Japan in China.  After the war the international conference at Washington (November 1921-February 1922) tried to set narrower limits to Japan’s influence over China, and also to re-determine the relative strength in the Pacific of the four great powers (America, Britain, France, Japan).  After the failure of the banking plan this was the last means of preventing military conflicts between the powers in the Far East.  This brought some relief to China, as Japan had to yield for the time to the pressure of the western powers.

The years that followed until 1927 were those of the complete collapse of the political power of the Peking government—­years of entire dissolution.  In the south Sun Yat-sen had been elected generalissimo in 1921.  In 1924 he was re-elected with a mandate for a campaign against the north.  In 1924 there also met in Canton the first general congress of the Kuomintang ("People’s Party").  The Kuomintang (in 1929 it had 653,000 members, or roughly 0.15 per cent of the population) is the continuation of the Komingtang ("Revolutionary Party”) founded by Sun Yat-sen, which as a middle-class party had worked for the removal of the dynasty.  The new Kuomintang was more socialistic, as is shown by its admission of Communists and the stress laid upon land reform.

At the end of 1924 Sun Yat-sen with some of his followers went to Peking, to discuss the possibility of a reunion between north and south on the basis of the program of the People’s Party.  There, however, he died at the beginning of 1925, before any definite results had been attained; there was no prospect of achieving anything by the negotiations, and the south broke them off.  But the death of Sun Yat-sen had been followed after a time by tension within the party between its right and left wings.  The southern government had invited a number of Russian advisers in 1923 to assist in building up the administration, civil and military, and on their advice the system