The Beiyang Army (literally “North Ocean Army”) was a powerful, Western-style Chinese military force created by the Qing Dynasty government in the late 19th century. It was the centerpiece of a general reconstruction of China’s military system. The Beiyang Army played a major role in Chinese politics for at least three decades and arguably right up to 1949. It made the Xinhai Revolution possible, and by dividing into warlord factions ushered in a period of regional division.
Japanese Gains Following the outbreak of World War I in 1914, Japan joined the side of the Allies and seized the German leasehold around Jiaozhou Bay together with German-owned railways in Shandong. China was not permitted to interfere. Then, on Jan. 18, 1915, the Japanese government secretly presented to Yuan the Twenty-one Demands, which sought in effect to make China a Japanese dependency. Yuan skillfully directed the negotiations by which China tried to limit its concessions, which centred on greater access to Chinese ports and railroads and even a voice in Chinese political and police affairs. At the same time, Yuan searched for foreign support. The European powers, locked in war, were in no position to restrain Japan, and the United States was unwilling to intervene. The Chinese public, however, was aroused. Most of Yuan’s political opponents supported his resistance to Japan’s demands. Nevertheless, on May 7 Japan gave Yuan a 48-hour ultimatum, forcing him to accept the terms as they stood at that point in the negotiations.
Japan gained extensive special privileges and concessions in Manchuria (Northeast China) and confirmed its gains in Shandong from Germany. The Hanyeping mining and metallurgical enterprise in the middle Yangtze valley was to become a joint Sino-Japanese company. China promised not to alienate to any other power any harbour, bay, or island on the coast of China nor to permit any nation to construct a dockyard, coaling station, or naval base on the coast of Fujian, the province nearest to Japan’s colony of Taiwan.
Conflict Over Entry into the War
In February 1917 the U.S. government severed diplomatic relations with Germany and invited the neutral powers, including China, to do the same. This brought on a crisis in the Chinese government. Li opposed the step, but Duan favoured moving toward entry into the war. Parliamentary factions and public opinion were bitterly divided. Sun Yat-sen, now in Shanghai, argued that entering the war could not benefit China and would create additional perils from Japan. Under heavy pressure, parliament voted to sever diplomatic relations with Germany, and Li was compelled by his premier to acquiesce. When the United States entered the war in April, Duan wished China to do the same but was again opposed by the president.
Duan and his supporters demanded that China enter the war and that Li dissolve parliament. On May 23, Li dismissed Duan and called on Gen. Zhang Xun (Chang Hsün), a power in the Beiyang clique and also a monarchist, to mediate. As a price for mediation, Zhang demanded that Li dissolve parliament, which he did reluctantly on June 13. The next day Zhang entered Beijing with an army and set about to restore the Qing dynasty. Telegrams immediately poured in from military governors and generals denouncing Zhang and the coup; Li refused to sign the restoration order and called on Duan to bring an army to the capital to restore the republic. Li requested that Vice President Feng assume the duties of president during the crisis and then took refuge in the Japanese legation. Duan captured Beijing on July 14; Zhang fled to asylum in the Legation Quarter, and this ended a second attempt to restore the imperial system.
Duan resumed the premiership, and Feng came to Beijing as acting president, bringing a division as his personal guard. The two powerful rivals, each supported by an army in the capital, formed two powerful factions: the Zhili (Chihli) clique under Feng and the Anhui clique under Duan. Opposed neither by Li nor by the dissolved parliament, Duan pushed through China’s declaration of war on Germany, announced on Aug. 14, 1917.
Although its wartime participation was limited, China made some gains from its entry into the war, taking over the German and Austrian concessions and canceling the unpaid portions of the Boxer indemnities due its enemies. It was also assured a seat at the peace conference. Japan, however, extended its gains in China. The Beijing government, dominated by Duan after Feng’s retirement, granted concessions to Japan for railway building in Shandong, Manchuria, and Mongolia. These were in exchange for the Nishihara loans, amounting to nearly $90 million, which went mainly to strengthen the Anhui clique with arms and cash. Japan also made secret agreements with its allies to support its claims to the former German rights in Shandong and also induced the Beijing government to consent to these. In November 1917 the 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 native-owned light industries developed markedly. By 1918 the industrial labour force numbered some 1,750,000. Modern-style Chinese banks increased in number and expanded their capital.
A three-way settlement ended the revolution: the Qing dynasty abdicated; Sun Yat-sen relinquished the provisional presidency in favour of Yuan Shikai (Yüan Shih-k’ai), regarded as the indispensable man to restore unity; and Yuan promised to establish a republican government. This placed at the head of state an autocrat by temperament and training, and the revolutionaries had only a minority position in the new national government.
 Gen. Li Yuanhong (Li Yüan-hung), the vice president, succeeded to the presidency, and Duan Qirui continued as premier, a position he had accepted in April. A man of great ability and ambition, Duan was supported by many generals of the former Beiyang Army, a powerful force based in northern China that developed originally under Yuan’s leadership. Duan quickly began to gather power into his own hands.