Japan is a close neighbor of China. After Meiji Restoration, capitalism developed rapidly in Japan, making the country a major power bursting with ambitions to expand its orbit. In July 1894, Japan dispatched ships carrying troops to defend the Korean king. Thus, Sino-Japanese War of 1894 broke out.

Defeated in city of Pyongyang, Qing army was forced to retreat, and the war was carried into China itself.

On the morning of September 17th, 1894, under the command of Ding Ruchang and Liu Buchan, 10 warships from Chinese Northern Fleet engaged 12 Japanese warships in Yellow Sea. Outnumbered by Japanese, most Chinese sailors fought bravely. When the warship Zhiyuan ran out of ammunition, its captain, Deng Shichang, tried to ram a Japanese ship. Zhiyuan was torpedoed and sank, and all its 200 officers and soldiers died heroically, including Deng Shichang himself. Lin Yongsheng, captain of the warship Jingyuan, also fought alongside his soldiers to the last moment of his life. After a few hours of fighting, Northern Fleet inflicted heavy loss while the Japanese side was also hit badly.

In November, Japanese army occupied Dalian and Lushun. In a period of only four days, Japanese massacred more than 18,000 inhabitants of Lushun.

In February 1895, Japanese army took the port of Weihaiwei, hence the total destruction of Northern Fleet.

In April 1895, Li Hongzhang represented China in signing the Treaty of Shimonoseki, a treaty of betrayal and humiliation, with Japan, according to which China had to pay Japan 200 million taels (unit of weight) of silver as war reparations and to cede Liaodong Peninsula and Taiwan to Japan. (Due to pressure from Tsarist Russia and other countries, Japan returned Liaodong Peninsula to China in return for 30 million taels of silvers)

This was accelerated the semi-colonization of China.