Likin Double Impact On The Business Sector And The National Finances In The Late Qing Period

A perfect tax system should have two functions: financial and economic. As the tool of state function, it provides enough finance revenue for the government to perform political function; As the distribution means of national income, it coordinates national economic growth. In the period of Late Ch'ing, however, Likin, a kind of commercial tax which had begun to be levied to alleviate financial crisis, completely escaped from its normal steps later. In one side it satisfied the financial need of the government in some extent and became an important resource of state finance. In another side it held up the industrial and commercial development of modern China badly and turned to be a negative example of tax. Just because of these contradictions, Likin continued to exist in the quarrel of cutting it or not. This paper emphasizes on the dual effects of Likin on industrial and commerce and state finance during the period of Late Ch'ing, so as to expose its contradiction.The context of this paper is composed of three parts:The first part explores Likin system on the whole. Including the reason it emerged, the process it spread and its characters as so irregular a commercial tax.The second part discusses the block of Likin to industrial and commerce of the period of Late Ch'ing. This part expounds from domestic industrial and commerce and international trade. The former analyzes the holdup Likin caused to the development of national modern industry in China and the formation of domestic market. The later talks about the holdback Likin produced to the export of domestic goods and the help the import got. Likin did great harm to the economy and dissatisfied all social classes strongly, so that the call of "cut out Likin" was so high.The third part discusses the support of Likin to state finance in the period of Late Ch'ing. Likin break the traditional structure of finance and tax, became one of four main resources of governmental finance; support important finance expenses of the state. furthermore, to disclose the emphasize on Likin of central and local government and practical obstruction to cut it.