East Asia at the beginning of the nineteenth century was dominated by China. The Qing dynasty, heir to a long tradition, seemed secure in its power, while Japan, a small island country, seemed to be locked in isolation. Yet, within a few decades China was thrown into turmoil unable to face the colonial challenge.
The imperial government lost political control, was unable to reform effectively and the country was convulsed by civil war. Japan on the other hand was successful in building a modern nation-state, creating an industrial economy and even establishing a colonial empire by incorporating Taiwan (1895) and Korea (1910). It defeated China, the land that had been the source of its culture and ideals, in 1894, and Russia, a European power, in 1905.
The Chinese reacted slowly and faced immense difficulties as they sought to redefine their traditions to cope with the modern world, and to rebuild their national strength and become free from Western and Japanese control. They found that they could achieve both objectives - of removing inequalities and of rebuilding their country - through revolution. The Chinese Communist Party emerged victorious from the civil war in 1949.
However, by the end of the 1970s Chinese leaders felt that the ideological system was retarding economic growth and development. This led to wide-ranging reforms of the economy that brought back capitalism and the free market even as the Communist Party retained political control.