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What Was the Open-Door Policy?

The Open Door policy was a statement of principles initiated by the United States in 1899 and 1900. “This is a policy that was a trade pact between powerful economic countries like the US, China, EU powerful countries, and Japan. It was started in the late 19th century by John Hay a former US Secretary of State. This was to allow countries to freely trade with China. This is because at that moment China had no trade pact with any country.”


This pact was to ensure equality in trading with China at that time. Not for one country to control entire China when it comes to trade.

In Business, “The creation of the open-door policy was to make it easy for junior employees to reach out to senior employees when they have an issue. “For example, if there is a departmental issue, the conflict between workers, ideas to improve the workplace, etc. It is not necessary for an employee to follow protocol but go to an office that they will receive assistance instantly.

What Led to Creation of Open-Door Policy?

In this article will major on open-door policy in foreign affairs. So, why was it created? This is a question you might be asking yourself. As earlier said, the US started it. This was to ensure trade equality in China. The main reason that led to this pact was that the US had doubts that it might lose its trade with China.

Additionally, this is after many of the powerful countries at that time had gone to China for reasons like colonization and gaining of territories. The US was kind of unlucky as it was one of the countries that arrived in China late.

On arrival, other countries had set up trade centers and had a better opportunity to trade in China which could have locked out countries like the US. Initially, the US had no concern to go to China. The interest came after the conclusion of the war between them and Spain. However, it had massive land in the Philippines that made them more anxious to acquire land in China too.

And on seeing other countries had already settled in China it made them more interested to have a share of China as it was a great place to trade. This could not have gone down easy as other countries had huge territories in China which could make access for American goods to China challenging. The Netherlands, Belgium, Great Britain, France, Russia, Italy, and Japan had already pitched camp in China.

Japan has access to China after defeating them in the Sino-Japanese war that took place between 1894 and 1895. With such countries, it could have been challenging for the US to trade effectively in China. Hence, led to the Open-Door policy.

The Implementation of the Open-Door Policy

The policy was ready to function but how was its implementation strategy? The US President as of that time William McKinley expressed his desire for a policy that would allow other countries to trade freely in China. And not to be denied trade access by other countries that have set protectorate in China already.

After consolations, the Secretary of State John Hay initiated consulting other countries that were in China already. He went to all those countries to push for this policy. In the policy administrators of Chinese origin were the ones to overlook at trade. Besides, all countries would have equal share when it comes to trading with China. This will create a level playing field for all countries barring one country from locking out countries from trading with China.

However, none of the countries that John Hay approached approved or denied this policy. Countries like Great Britain, Netherlands, Italy, and France without endorsement supported this policy. This made the US secretary of state to formally announce the enactment of this policy. It eventually became a trading policy in China.

Trade restrictions to Japan by the US were implemented as Japan was in war with China again in 1937. The open-door policy was being used until Japan lost World War 2 and China’s civil war concluded.

Effects of Open-Door Policy

After China had the power to fully manage its affairs the trade policy continued but open-door policy changed to China’s policy enabling other countries to openly trade in China and finance projects too. This policy had major effects. They comprise of:

  • Criticism of Foreigners in China

With this policy, many countries had access to China which led to the influx of foreigners in China. The Chinese nationals saw them as colonizers hence retaliations against them began. Such occurrences like the Boxers or Social of Righteous Harmonious Fist movements began retaliating against foreigners. This was in 1899 but foreign countries fought back and won against them in 1901. This rebellion against foreigners didn’t go well as the fight against them continued.

  • War Between China and Japan. While Trade Sanctions Between the US and Japan

Violation of the Open-Door policy by Japan led to major effects. After winning the first Sino-Japanese war Japan wanted the expansion to its territory (Manchuria) and trade zones in China. This move angered both the US, China, and other countries present in China at that time. In 1922 all countries in China at that time assembled at Washington for the Washington Naval Conference. This conference led to the agreement of nine treaties and China to become a sovereign state.

Later in 1915 Japan went against the treaties agreement in Washington and the open-door policy and had twenty-one demands for China to enact. Leading to criticism by other countries and later another Sino-Japanese war that lasted for eight years (1937-1945). The violation was known as the Mukden Incident. This mad the US to issue trade restrictions to Japan. In 1941 Japan bombed Pearl Harbor. This move led to World War 2 between Japan and the US.

  • US Affection for Eastern Asia

Making money was the key issue for the US to bring up the open-door policy. This made them more influential in Eastern Asia and after successful trade with China, they sought to trade with other countries too. However, their presence in East Asia had negative effects too. Like war with Japan and the Boxer Rebellion.

Conclusion of the Open-Door Policy

After winning the civil war China 1949 the open-door policy became inexistent.

In Business

This term means that senior organization employees such as managing directors, supervisors, etc. can be easily accessed by junior staff members at any time. This is a policy whereby there is a good relationship between all members of an organization despite their positions.

“In other words where their ideas can be taken into consideration faster rather than taking time to reach the appropriate employee.” To improve the working conditions of your organization you can adopt this policy and you will see the change instantly. However, this policy has its demerits too. Will discuss and see how you can avoid such issues from occurring.

Pros of Open-Door Policy in Business

  • Leads to a good relationship between workers and bosses
  • Generation of ideas by employees
  • Timely resolution of issues or challenges facing workers
  • Improvement in quality of work which leads to an increase in income

Cons of Open-Door Policy in Business

  • Employees fear to lose their work by being open. Some avoid intimidation by other workers or senior employees.
  • Some organizations deploy this policy to avoid the creation of labor unions
  • Tensions between employees. As supervisors may feel disrespect by other workers.

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About Sonia Kukreja

I am a mother of a lovely kid, and an avid fan technology, computing and management related topics. I hold a degree in MBA from well known management college in India. After completing my post graduation I thought to start a website where I can share management related concepts with rest of the people.