Wilson's capitulation provoked fierce criticism in China, where irate students took to the streets. It also fed Wilson's growing problems at home with Congress, where opposition to the president's cherished League of Nations mounted amid accusations that the administration had sold out its own principles. But Wilson's calculation was plain: it was better to stay on Japan's good side and ensure the country's participation in the League of Nations, which would inevitably take up the China question later on. Things might, then, turn out well in the long run. Wilson's ambitious vision of an international solution in China came to naught, of course, when Congress rejected the league in 1920. Ironically, however, his successor, the notoriously unambitious Warren Harding, followed Wilson's reasoning quite closely, opting to deal with rivalries in China by gathering all of the great powers together to work out their differences and establish new principles of conduct in the Far East. The result, the Washington Conference of 1921–1922, was an important diplomatic victory for the United States and a major—if temporary—breath of life for the Open Door policy.
Following World War I, Japanese power in the Far East continued to mount. In the 1920s Japan accounted for about 90 percent of all new foreign investment in China, while a quarter of all Japanese exports went there. In many ways, Japan's relationship with the mainland resembled the economic and political stranglehold the United States held over the Caribbean and Central America. The Chinese economy was increasingly locked in to Japanese needs, as both recipient of Japanese investment and manufactured goods and as supplier of food and raw materials. The dramatic growth of Japan's naval power also alarmed American observers by raising the specter of a Japanese challenge to Anglo-American control of Pacific commerce. By 1921 warship construction consumed fully one-third of Japan's budget. Fearing a naval arms race, Secretary of State Charles Evans Hughes invited the foreign ministers of eight maritime nations to Washington to reduce tensions in the Far East. The Japanese government, content to pursue its aims peacefully, entered into all three of the resulting treaties. A four-power nonaggression pact committed Japan, the United States, Britain, and France to consult in the case of future controversies. Meanwhile, a five-power agreement, which included Italy, checked the naval arms race by fixing limits on the size of each navy. By far the most important treaty for the future of the Open Door policy was the Nine-Power Treaty that called for noninterference in China's internal affairs and respect for the Open Door principle. In words that John Hay himself might have written, the agreement bound signatories "to respect the sovereignty, the independence, and the territorial and administrative integrity of China."
The treaty was the most promising assertion of the Open Door policy since Hay's notes. In contrast to the halting and piecemeal promises of the various powers over the previous two decades to uphold the principle of equal economic opportunity, the Washington agreements solemnly bound all of the principal powers (except the excluded Soviet Union) and even reflected input from a full-fledged Chinese delegation. Moreover, the agreements had the strength of acknowledging, rather than resisting as so often in the past, Japan's emergence as the dominant power in the Far East. As a strategy for maintaining the Open Door, the international approach outshined Roosevelt's appeasement, Taft's dollar diplomacy, or Wilson's early dedication to principle. To be sure, underlying problems remained. For one thing, the agreements contained no enforcement mechanism. Nor did they challenge the existing Japanese position in China. In fact, Elihu Root assured Japan early in the negotiations that the United States would not challenge Tokyo's special privileges. All the Chinese government obtained from the powers was permission to raise its import tariff by 5 percent and a promise to study ways of ending extraterritoriality. Most importantly, the agreements held little promise for slowing Japan's economic penetration of China and preserving a truly fair field for American goods. So strong had Japan's economic grip over China become that it no longer had much reason to fear American competition. To a considerable degree, Japan had achieved the dominant commercial position in China that Americans believed would naturally fall to them if the door were kept open.
Those underlying problems remained submerged, however, during the hopeful years that followed the Washington Conference. In Tokyo, a relatively democratic and progressive Japanese government abided by the conciliatory stance adopted at the meeting. Although overpopulation, resource shortages, and old dreams of empire on the mainland continued to drive Japanese policy, the government displayed little appetite for bold moves that would arouse the other powers. Meanwhile, U.S.–Japanese relations warmed dramatically amid a burst of American enthusiasm for Japan's economic efficiency and administrative reliability, which stood in sharp contrast to ongoing chaos in China. World War I had witnessed a vast expansion of U.S.–Japanese commerce, and during the 1920s the United States confirmed its position as Japan's most important trading partner.
If improved relations with Japan gave Americans reason to think the Open Door policy was safe from its most likely opponent, the shifting situation in China gave them hope that their ultimate dream—a unified China freed from foreign constraints and providing stable access for American goods—might be coming true. After years of political turmoil, the nationalist movement of Sun Yat-sen and Chiang Kai-shek began to make headway in the mid-1920s toward unifying the country under a viable central government. Among the nationalists' foremost objectives was the abolition of the "unequal treaties" that enshrined foreign privileges on Chinese soil. At first, U.S. officials resisted Chinese pressure to end the privileges it had obtained. Indeed, when Sun overstepped treaty provisions in 1923 by claiming surplus customs receipts, U.S. warships joined an international fleet to deter him. But Americans were hardly unified behind that approach, and an increasing number were horrified by practices that suggested colonial designs against a vigorous young republic. While some diplomats prized U.S. treaty privileges and backed gunboat diplomacy to maintain them, most Americans returned to the old vision of a wholly sovereign and administratively competent China as the key to realizing the bounty of the China market. The latter group gained the upper hand in 1928 after Chiang successfully concluded his Northern Expedition, a moment Americans chose to interpret as signaling the arrival of a united China under Kuomintang rule. On 25 July, the United States unilaterally granted tariff autonomy to China in exchange for a new guarantee of most-favored-nation status.
The American move ended one of the most humiliating aspects of the foreign presence in China and marked a moment of triumph for those Americans who had never lost faith that the United States would be China's savior. But it also provoked a powerful Japanese response against which the United States was powerless. It is one of the instructive ironies of the Open Door policy that its final downfall followed so closely on the heels of its apparent heyday. Even at its high point, the policy was more illusion than reality, riddled with so many flaws that it could be demolished once Japan decided to act. Japanese policy began to turn in the late 1920s, when Chiang challenged Japanese privileges in Manchuria. That Chiang did so with the clear support of the United States meant that American economic interests would inevitably gain at Japanese expense. As Tokyo feared, Japanese exports dropped by one-half between 1929 and 1931. The threat to Japan's prestige and its hardwon privileges on the mainland was more than the Japanese military and hard-line nationalists could abide. On 18 September 1931, mid-ranking Japanese army officers acted boldly to reverse this trend, blowing up a section of railway in Manchuria and then blaming Chinese nationalists for the act. The episode, known as the Mukden Incident, became the pretext for Japan to occupy the entire region. Less than a year later, Japan's Kwantung army succeeded in detaching Manchuria from the rest of China and creating the puppet state of Manchukuo.
The timid U.S. response pointed up the weaknesses that had riddled the Open Door policy since its inception. The Hoover administration answered not with economic sanctions but with an ineffective declaration of "nonrecognition" of Japanese aggression. Secretary of State Henry L. Stimson informed the Japanese government that the United States would not recognize any "treaty or agreement" brought about by force or coercion. The U.S. response partly reflected the administration's domestic preoccupations and the unwillingness of the American public to take on foreign commitments as the Great Depression worsened. But other deterrents to bold American action had existed long before the global economic crisis. First of all, the United States, just as in 1898, lacked the ability to back up any diplomatic démarche with force. The U.S. Navy was the world's second largest by 1930, but it still could not hope to challenge Japan in Far Eastern waters. Also discouraging any bold American reply was the longstanding problem, recognized by Theodore Roosevelt two decades before, that China just did not matter very much. Despite all of the hype about the China market and America's special role, China still played a relatively insignificant role in the U.S. economy. Through the 1920s and 1930s, China accounted for only about 2 percent of total U.S. exports each year. In the same period, by contrast, Japan absorbed between 8 and 10 percent of U.S. exports. There was thus little incentive to challenge Japan on behalf of China.
When exactly the demise of the Open Door policy should be dated is open to debate. Certainly, 1931 qualifies as a leading contender. In that year, after all, the partition of China, the development that the Open Door policy had been designed to avoid, came about with breathtaking decisiveness. Moreover, Japan's 1932 attack on Shanghai signaled that Tokyo's ambitions extended far beyond Manchuria. Another possible end point is 1937, the beginning of a full-fledged Sino-Japanese war that quickly resulted in Japanese control over virtually all of the ports, railroads, and other industrial facilities throughout China. A third contender is 1950, when Mao Zedong, having completed the communist conquest of China, slammed the door shut against the United States. Only then, perhaps, did Americans finally give up on the idea that the United States could reopen the door after Japan's defeat. Indeed, during the mid-1940s U.S. leaders had clearly entertained notions of reestablishing a major American presence, only to see their hopes crushed by a movement that, more than any other, reflected a century of Chinese resentment over foreign intervention. The communists' special wrath for the United States illuminates more clearly than anything else the delusion of exceptionalism that had underpinned American policy for half a century.