I'm doing some background research on a paper and have just learned about the Self-Strengthening Movement in Qing China. It seems odd to me that the traditionally more resourceful and powerful player in the region would fall behind a smaller state in a similar situation (increasing foreign pressure, stagnant regime).
Given the long history of China being the pivot of East Asian power, how is it that Japan managed to change that balance through modernisation?
I actually wrote an essay on virtually this exact subject for my degree. I'll try and summarise and add any new opinions or evidence I have.
China and Japan a number of similarities but also some key differences. The differences include Japan having a higher initial economic base, and political and cultural advantages and good fortune. Japan took the lead in the 19th century, and after this it was very hard for China to catch up, particularly with Japan actively working against it.
So, firstly, comparing wealth and productivity is very difficult, but Japan appears to have had higher per capita agricultural productivity. In almost every pre-modern economy, agriculture provides the bulk of the capital for development, so being able to extract a surplus without starving your peasants is important. One of the basic maxims of economic development is that economies with an initial advantage tend to do better (or success breeds success).
Culturally both countries deprecated merchants and trade, but in practice Japan had a considerable commercial economy. Both at the village and the town level, various cultural and social factors favoured the Japanese. The negative effects of Confucian bureaucratism were not as strong as in China. It's worth noting Japan also had unusually high rates of both urbanisation and literacy.
The two countries had similar relationships with Western powers. They were initially isolationist, forced into unequal treaties, before accepting the need to adopt Western technology and techniques in order to compete. China suffered more from Western imperialism in large part because it was a bigger prize. And the costs were indeed high, in terms of wars, loss of control (one Englishman ended up in control of China's tariff system - although he did go native) and financial indemnities. Japan had the advantage of watching and learning from China's defeats. It's possible also that Western powers saw a modernising Japan as less of a threat than a powerful China - indeed they even used Japan against China.
Japan was quicker to recognise the need for fundamental change and to implement it. Looking at the two countries it's not hard to see reasons for this. China was great in longevity, size, and wealth. Japan, on the other hand has sometimes been viewed as a "cultural borrower." According to one source, support for industrialisation was fairly solid among Chinese officials by the 1890s, though it still faced problems with the court and Empress Dowager.
China faced greater internal conflicts than Japan. In the 1850s it suffered the catastrophic Taiping Rebellion, put down with Western aid. The primary goal of China's rulers was to stay in power, and to do this they were willing to accept Western help and influence. By these standards, the Qing were actually successful in the 19th century.
Japanese modernisers were able to carry out a revolution, while maintaining the traditional figurehead of the Emperor. By the 1870s Japan was relatively unified around a programme of modernisation ("relatively" - there were still rebellions and political violence, but not serious threats). The new Japanese government was fortunate that some of its potential opponents - many daimyo and samurai - were indebted and demoralised. The quality of Japanese leadership is usually rated as very good. In particular, they were patient enough to wait before pressing Western powers (the first equal treaty was not signed until 20 years after the Meiji restoration).
China did have some significant growth after 1911, but this came alongside civil war and the breakdown of centralised authority. Industrialisation was patchy and the relatively industrialised region of Manchuria was increasingly controlled by Japan. While China was fragmenting, Japan was benefiting from the First World War.
Some sources:
Halliday, J., A Political History of Japanese Capitalism
Yoshihara, K., Japanese Economic Development
Richardson, P., Economic Change in China, c.1800-1950
Wong, R.B., China Transformed: historical change and the limits of European experience
You might be interested in some previous questions comparing the modernization of Meiji Japan to contemporary powers such as Qing China:
Meiji Japan and Qing China
Other Comparisons