Under the new conditions cliques or individuals among the gentry could only ally themselves with the possessors of military power, the generals or governors. Never was there such bribery and corruption among the officials as in the years after 1912. This period, until 1927, may therefore be described as a period of dissolution and destruction of the social system of the gentry.

As the new republic emerged so did "The Three Principles of the People" and "Plans for the Building up of the Realm". The three phases of development through which republican China was to pass were:

China had recognized that she must at least adopt Western technical and industrial progress in order to continue to exist as an independent state. However, the building up of industry demanded large sums of money. The existing Chinese banks were quite incapable of providing the capital needed; but the acceptance of capital from abroad led at once, every time, to further political capitulations.

No less complicated was the intellectual situation at this time. Confucianism, and the whole of the old culture and morality bound up with it, was unacceptable to the middle-class element. Taoism was out of the question as a substitute, because of its anarchistic and egocentric character. Consequently, in these years, there was a partial move towards Buddhism and part to Christianity. Others adhered to modern philosophic systems such as pragmatism and positivism. Marxist doctrines spread rapidly.

Many students and professors were active in politics, organizing demonstrations and strikes. They pursued a strong national policy, often also socialistic. The situation of the Republic after its foundation was far from hopeful. Republican feeling existed only among the very small groups of students who had modern education, and a few traders, in other words, among the "middle class". The generals who had gone over to the republicans had not the slightest intention of founding a republic, but only wanted to get rid of the rule of the Manchus and to step into their place. Thus, the first period of the Republic, until 1927, was marked by incessant attempts by individual generals to make themselves independent. The Government could not depend on its soldiers, and so was impotent. The governors and generals who wanted to make themselves independent sabotaged every decree of the central government; especially they sent it no money from the provinces and also refused to give their assent to foreign loans.

China's internal difficulties reacted on the border states, in which the European powers were keenly interested. The powers considered that the time had come to begin the definitive partition of China. Thus, there were long negotiations and also hostilities between China and Tibet, which was supported by Great Britain. In Outer Mongolia Russian interests predominated. In 1911 there were diplomatic incidents in connection with the Mongolian question. In 1913 a Russo-Chinese treaty was concluded, under which the autonomy of Outer Mongolia was recognized, but Mongolia became a part of the Chinese realm.

About the middle of the nineteenth century the influence of Europe became more and more marked in terms of Western thought. Noticeable change began with the translation of philosophical and scientific books and books on social questions. There followed a new style, which was soon elaborated and which culminated in the "literary revolution" of 1917.

At the time when Russian penetration into Mongolia began, Japan had entered upon a similar course in Manchuria, which she regarded as her "sphere of influence". Japan's plans were revealed in the notorious " Twenty-one Demands". At the end of the first world war Japan had a hold over China amounting almost to military control of the country.

The death of Sun Yat-sen was followed by tension within the party between its right and left wings. The southern government had invited a number of Russian advisers in 1923 to assist in building up the administration, civil and military, and on their advice the system of government had been reorganized on lines similar to those of the soviet and commissar system. Chiang Kai-shek soon became one of the principal leaders of the south, as he had command of the efficient troops of Guangzhou, who had been organized by the Russians.

The People's Party, under Chiang Kai-shek and with the support of the communists, began the great "Northern campaign" against the north. At first it had good success: the various provincial governors and generals and the Beijing government were played off against each other, and in a short time one leader after another was defeated. The Yangtze was reached, and in 1926 the southern government moved to Hankow. All over the southern provinces there now came a genuine rising of the masses of the people, mainly the result of communist propaganda and of the government's promise to give land to the peasants, to set limits to the big estates, and to bring order into the taxation.

From 1933 onward Japan followed up her conquest of Manchuria by bringing its influence to bear in Inner Mongolia and in North China. Japan succeeded first, by means of an immense system of smuggling, currency manipulation, and propaganda, in bringing a number of Mongol princes over to its side, and then (at the end of 1935) in establishing a semi-dependent government in North China. Chiang Kai-shek took no action.

Russia had shown that the theoretical writings of Lenin and communist doctrine could be applied to a country similar to China in its level of development. Mao Zedong had given up his studies in Beijing and had returned to his home in Hunan. Here, he organized his countrymen, the farmers of Hunan. Mao developed his ideas in written form in 1927; he showed that communism in China could be successful only if it was based upon farmers.

When the Japanese War began, the communists in Yen-an and the Nationalists under Chiang Kai-shek agreed to co-operate against the invaders. Yet, each side remembered its experiences in 1927 and distrusted the other.