8.8: The Great Depression - Asia

China

While most of the focus around the Great Depression centered on Europe and the United States, there were also significant impacts in Southeast Asia.  In China, the creation of the republic in 1912 and the establishment of the Kuomintang (KMT) meant changes to government and political alliances, but Sun Yat-sen had little time to establish these new structures before the outbreak of war pulled most of the world into crisis.  Through the 1910s and into 1920s, China lacked strong centralized leadership and was dominated by warlords, and while the death of Sun Yat-sen in 1925 saw the emergence of Chiang Kai-Shek as the new leader of the KMT, the economy was already struggling due to the lack of any kind of centralized control.  In the 1920s, China’s economic structure was centered on the silver standard – making it the only significant state at the time to be on something other than the gold standard, as following the suspension of the international standard during World War I, most of the major powers had returned to it, including the United States in 1919 and Great Britain in 1925.  As silver prices fluctuated, China’s economy suffered and the country began to suffer from severe deflation, making it vulnerable to market variations and political destabilization.  It was during this uncertainty that the Chinese Communist Party began to make gains (see below for more on the political history of the period).

India 

As they had with other colonies, the British trained and educated locals in India as soldiers, police, government administrators, and professionals in the nineteenth century in order to run the Empire, claiming they were preparing India for eventual self-rule. When the promised self-rule would begin became a source of debate and conflict between the colonizers and the colonized. In 1885, a group of British-educated Indian reformers organized the Indian National Congress (INC) to protest the unfair treatment of Indians by the British. The INC believed that they were already administering the country and no longer needed British bureaucrats to tell them what to do. When Mohandas K. Gandhi returned to India in 1915, after years of using non-violent tactics to fight for the rights of Indians in South Africa, he joined the INC, and embraced asceticism and simplicity as a way of life. The following year, the mostly-Hindu Congress united with Mohammed Ali Jinnah’s Muslim League in a sincere attempt to create a party that represented all of the peoples living in British India. 

When World War I began, Indian soldiers took part in many of the British campaigns, especially in Africa and the Ottoman Empire.  The Indians supplied Great Britain with not only soldiers, but with supplies, ammunition, and textiles.  As with other states around the globe, World War I led to economic increases in India, and the end of the war saw those increases plummet.  Some of the most consistently exported Indian goods, such as jute, saw the market plunge and Indian farmers took a significant hit, and while the British government passed some measures to assist the Indian population, many saw these actions as less than genuine.  As the curtailing of exports, especially in agriculture, continued, many farmers were forced to sell gold ornaments and trinkets worn by family members in order to pay off their debts.  Indians, led by the INC and the Muslim League, began to protest these conditions, especially because the gold that made its way to Great Britain helped shore up the British economy.  The INC had already stated in 1929 that their new goal was complete independence from British rule, and as the Depression became more significant and had greater impacts globally, this helped to solidify that aspiration.  Figure 8.8.1 shows the first of the great marches in 1930 against the British government occurred, with Gandhi leading a group of followers to the ocean to make salt, which was illegal based on the British monopoly, and the demands for independence gained steam.

 

 

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Figure \(\PageIndex{1}\): Salt March by Yann, in the Public Domain

Discussion Question

Why was the Salt March such a radical act?

The British responded to these concerns by creating a centralized bank in 1935, although it remained very much in the hands of the British and particularly the Viceroy (the leader of the British in India, as designated by the king of England) and his counsel.  Other measures, including allowing for greater Indian participation in the provinces, also occurred, but the Great Depression had taken a significant toll on the Indian population and they blamed the British government for their woes.

India’s frustration with being tied to the British economy did not end when World War II began – if anything, it intensified, and throughout the war period the INC and the Muslim League continued to discuss independence as a right for India at the end of the war.  That independence would not occur in the manner that the INC and the Muslim League had initially viewed – instead, the British would divide the country to create East and West Pakistan, in addition to India, imposing new economic challenges on the state. This divide was largely driven by the religious conflict between the colony’s Hindu majority and its Muslim minority.  When independence comes, much of Western India, as well as territory in the East, will become Pakistan – a state physically divided and separated by India.

Review Questions

• Why was India divided the way that it was?  Was there a workable alternative?
• How was China's post-World War I experience different from that of Japan?