Wang Puppet Government Financial

The thesis discusses, from the political-economic history perspective, the puppet characteristic of Wang Ching-wei's regime from its lack of independence and autonomy on finances.On March 30,1940, "the National Government" headed by Wang Ching-wei and under Japanese control was created in Central China, which was then the most economically developed region. The puppet regime established a fiscal revenue structure in which the main body was taxation. It expanded the revenue scale incessantly and obtained considerable effects prior to the outbreak of the Pacific War in December 1941. The government's fiscal revenue achieved surplus in 1940 and 1941. However, Wang's regime as a vital member of Japan's Greater East Asia Co-Prosperity Sphere rendered it to unreservedly support its host country and consequently caused fiscal disorder. In 1942, the government's finance basically remained balance. In 1943, consumption expenditure significantly exceeded revenue. In 1944, the fiscal deficit further deteriorated and finally collapsed in 1945.Four characteristics can be clearly deduced from analyzing the transformation of Wans's fiscal condition. Firstly, different from other false regimes, the fiscal structure it established was claimed to be inherited from the legitimate government—former Nanking National Government. Secondly, in order to serve Japan's invasive purpose, Wang's fiscal principle shifted from conservative to passive, from making both ends meet to adjusting income according to expenditure. Thirdly, Japan's "guidance" led to Wang's lack of fiscal autonomy. Fourthly, Wang's fiscal system was divided by Japan's "ruling in partitions" policy so that its finances in North China were never under Wang's control.Wang's puppet regime was created for Japan's purpose of using the Chinese to rule the Chinese and to achieve the goal of using the war to sustain the war, hence Wang's changeable fiscal situation. The outbreak of the Europe War in September 1939 forced Japan to shift its attention from China to the south Pacific region and gave Wang a good chance to settle with its finances. In 1940 and 1941, the most economically constructive years in Wang's administration, the economy in Central China region almost recovered to its pre-war level thus provided a sound fiscal base for Wang's regime. Nevertheless, Wang's fiscal revenue worsened with the outbreak of Pacific War and the rise of military expenditure caused by QingXiang movement in July 1941. By 1942, Wang's fiscal could hardly remain stability without Japan's assistance. Japan's failure in the Pacific War in 1943 heavily burdened Wang's finances by extensively requiring goods, materials and military expenditures. During 1944 and 1945, Wang's fiscal balance was distorted and finally came to a collapse.