Questions about the "first" science fiction are difficult because they depend as much on one's definition of SF as on the historical existence of particular texts. Do we mean any literature that alludes to themes common in sci-fi today, like otherworldly journeys or superpowered humans? Or do we mean fiction stories that grapple with extrapolations from contemporary technology, in a scientifically-appropriate fashion to some near or far future setting? Or do we take the philosophical approach, and mean fiction stories that directly or indirectly address what it means to be human in a world where Science is god (and "human" might include alien)?

That said, there are really two eras in the history of Chinese literature that can be seen as the cradle of literature with speculative themes. I'll leave it to you to decide which one counts as the "first science fiction."

Ancient Chinese philosophical literature incubated a genre based on journeys of self- and other-discovery. Not infrequently, the last of the spirit journeys of a particular narrator will be to another world, in the heavens. The earliest of these stories come from the Chu Chi, which is attributed to a bureaucrat named Qi Yuan around the 300s/200s BCE. But many scholars would argue to date these stories a little later, maybe around the time Zhang Heng is writing (he died in 139 CE). ZH was an astronomer, inventor, mathematician, poet, all-around smart person. His "Pondering the Meaning of Life" takes a narrator stalled in his career ambition. The narrator goes on a series of spirit journey around the world, each time seeing his problems from a literal new direction. The final spirit journey takes him up into space for a entirely new perspective.

Of course, these space and otherworld journeys are the stuff of philosophy, not really science fiction. ZH is not interested in rockets and spaceships to take his professionally adrift narrator into low Earth orbit.

For that, we have to turn to the years around 1900.

While one can trace a slow and choppy buildup to this point in the West, the first recognizably modern SF in the sense of the fictional literature hinging on scientifically-based extrapolation coalesces at the end of the 19th century in Europe and America. Broadly, the Europeans in particular develop a genre of future war or invasion literature that focuses on military extrapolations of technology, most famously the Battle of Dorking (Wells' War of the Worlds is the crown jewel of this subgenre); Americans have their "inventor stories" of the American frontier, like the Frank Reade, Jr. and Girl Aviator novels. In this mix, French author Jules Verne in particular emerges as an international sensation, building on the best of the two basic genres but from his own angle (and with, frankly, better plots).

In 1894-95, China suffered a pretty nasty defeat in the first Sino-Japanese War. This seems to have resulted in quite the self-examination among Chinese intellectuals and some leaders, who were stunned to watch the more technologically advanced Japan crush the Chinese armies somewhat stagnated by the previous century's attempts at isolationism. There were some initial attempts at Westernization/modernization, like the so-called 100 Days of Reform, but in conjunction with concern over the growing political power of Western Christian missionaries, the early reform efforts failed rather spectacularly. The Boxer Rebellion of 1900 is emblematic of this attempt at retrenchment.

But! In the aftermath of the Boxers, European occupation and Japanese influence nevertheless contributed to a push to implement some of the same types of reforms that had led to the Boxer Rebellion! The education reforms from 1901, reinforced after 1908, were particularly crucial. Chinese leaders wanted to turn their country towards technology and science. And to this end, the nascent, not-yet-named genre of science fiction literature was pressed into service.

A driving figure of this movement was Lu Xun, also considered one of the progenitors of modern Chinese literature. Studying in Japan, Lu Xun saw the potential of speculative lit to inspire scientifically-minded thoughts. One of his first literary efforts was a loose translation of Verne's De la terre de a la lune into Chinese, expanding on the initial tale with elements drawn from Chinese oral tradition.

Meanwhile, founder of the Chinese literary journal New Fiction, Liang Qichao, was also keenly aware of the potential power of speculative science stories to inspire interest in science and technology. Liang published translations of other works by Verne, as well as his own original SF stories. Other authors got in on the action. In 1910, Lu Shi'e projected Shanghai into the "New China" of 1950, an overtly politicized take on how China could use new technology to overcome problems the West was unable to surmount.

So next to Europe's concern with future wars and America's passion for the individualist inventor of the frontier, we can set China's literature of politicized reform right at the heart of the key national influences on the rise of science fiction.