<P> On October 6, 1900 Britain and Germany signed the Yangtze Agreement, providing that they would oppose the partition of China into spheres of influence . The agreement, signed by Lord Salisbury and Ambassador Paul von Hatzfeldt was an endorsement of the Open Door Policy proposed by the United States for free trade in China . However, Germany's failure to keep up the agreement led to the Anglo - Japanese Alliance of 1902 . </P> <P> In 1902, the United States government protested that Russian encroachment in Manchuria after the Boxer Rebellion was a violation of the Open Door Policy . When Japan replaced Russia in southern Manchuria after the Russo - Japanese War (1904--05) the Japanese and U.S. governments pledged to maintain a policy of equality in Manchuria . In finance, American efforts to preserve the Open Door Policy led (1909) to the formation of an international banking consortium through which all Chinese railroad loans would agree (1917) to another exchange of notes between the United States and Japan in which there were renewed assurances that the Open Door Policy would be respected, but that the United States would recognize Japan's special interests in China (the Lansing--Ishii Agreement). The Open Door Policy had been further weakened by a series of secret treaties (1917) between Japan and the Allied Triple Entente, which promised Japan the German possessions in China on successful conclusion of World War I . The subsequent realization of such promise in the Versailles Treaty of 1919 angered the Chinese public and sparked the protest known as May Fourth Movement . The Nine - Power Treaty, signed in 1922, expressly reaffirmed the Open Door Policy . </P> <P> Since the policy in effect hindered Chinese sovereignty, the government of the Republic of China endeavored to revise related treaties with foreign powers in the twenties and thirties . Only after the conclusion of World War II did China manage to regain its full sovereignty . </P> <P> In China's modern day economic history the Open Door Policy refers to the new policy announced by Deng Xiaoping in December 1978 to open the door to foreign businesses that wanted to set up in China . Special Economic Zones (SEZ) were set up in 1980 in his belief that in order to modernize China's industry and boost its economy, it needed to welcome foreign direct investment . Chinese economic policy then shifted to encouraging and supporting foreign trade & investment . It is the turning point in China economic fortune that truly started China on the path to becoming' The World's Factory' . </P>

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