Economically, Shu Han was not in a bad position. The country had long been part of the Chinese wheat lands, and had a fairly large Chinese peasant population in the well irrigated plain of Ch'engtu. There was also a wealthy merchant class, supplying grain to the surrounding mountain peoples and buying medicaments and other profitable Tibetan products. And there were trade routes from here through the present province of Yünnan to India.
Shu Han's difficulty was that its population was not large enough to be able to stand against the northern State of Wei; moreover, it was difficult to carry out an offensive from Shu Han, though the country could defend itself well. The first attempt to find a remedy was a campaign against the native tribes of the present Yünnan. The purpose of this was to secure man-power for the army and also slaves for sale; for the south-west had for centuries been a main source for traffic in slaves. Finally it was hoped to gain control over the trade to India. All these things were intended to strengthen Shu Han internally, but in spite of certain military successes they produced no practical result, as the Chinese were unable in the long run to endure the climate or to hold out against the guerrilla tactics of the natives. Shu Han tried to buy the assistance of the Tibetans and with their aid to carry out a decisive attack on Wei, whose dynastic legitimacy was not recognized by Shu Han. The ruler of Shu Han claimed to be a member of the
imperial family of the deposed Han dynasty, and therefore to be the rightful, legitimate ruler over China. His descent, however, was a little doubtful, and in any case it depended on a link far back in the past. Against this the Wei of the north declared that the last ruler of the Han dynasty had handed over to them with all due form the seals of the state and therewith the imperial prerogative. The controversy was of no great practical importance, but it played a big part in the Chinese Confucianist school until the twelfth century, and contributed largely to a revision of the old conceptions of legitimacy.
The political plans of Shu Han were well considered and far-seeing. They were evolved by the premier, a man from Shantung named Chu-ko Liang; for the ruler died in 226 and his successor was still a child. But Chu-ko Liang lived only for a further eight years, and after his death in 234 the decline of Shu Han began. Its political leaders no longer had a sense of what was possible. Thus Wei inflicted several defeats on Shu Han, and finally subjugated it in 263.
The situation of the state of Wu was much less favourable than that of Shu Han, though this second southern kingdom lasted from 221 to 280. Its country consisted of marshy, water-logged plains, or mountains with narrow valleys. Here Tai peoples had long cultivated their rice, while in the mountains Yao tribes lived by hunting and by simple agriculture. Peasants immigrating from the north found that their wheat and pulse did not thrive here, and slowly they had to gain familiarity with rice cultivation. They were also compelled to give up their sheep and cattle and in their place to breed pigs and water buffaloes, as was done by the former inhabitants of the country. The lower class of the population was mainly non-Chinese; above it was an upper class of Chinese, at first relatively small, consisting of officials, soldiers, and merchants in a few towns and administrative centres. The country was poor, and its only important economic asset was the trade in metals, timber, and other southern products; soon there came also a growing overseas trade with India and the Middle East, bringing revenues to the state in so far as the goods were re-exported from Wu to the north.
Wu never attempted to conquer the whole of China, but endeavoured to consolidate its own difficult territory with a view to building up a state on a firm foundation. In general, Wu played mainly a passive part in the incessant struggles between the three kingdoms, though it was active in diplomacy. The Wu kingdom entered into relations with a man who in 232 had gained control of the present South Manchuria and shortly afterwards assumed the
title of king. This new ruler of "Yen", as he called his kingdom, had determined to attack the Wei dynasty, and hoped, by putting pressure on it in association with Wu, to overrun Wei from north and south. Wei answered this plan very effectively by recourse to diplomacy and it began by making Wu believe that Wu had reason to fear an attack from its western neighbour Shu Han. A mission was also dispatched from Wei to negotiate with Japan. Japan was then emerging from its stone age and introducing metals; there were countless small principalities and states, of which the state of Yamato, then ruled by a queen, was the most powerful. Yamato had certain interests in Korea, where it already ruled a small coastal strip in the east. Wei offered Yamato the prospect of gaining the whole of Korea if it would turn against the state of Yen in South Manchuria. Wu, too, had turned to Japan, but the negotiations came to nothing, since Wu, as an ally of Yen, had nothing to offer. The queen of Yamato accordingly sent a mission to Wei; she had already decided in favour of that state. Thus Wei was able to embark on war against Yen, which it annihilated in 237. This wrecked Wu's diplomatic projects, and no more was heard of any ambitious plans of the kingdom of Wu.
The two southern states had a common characteristic: both were condottiere states, not built up from their own population but conquered by generals from the north and ruled for a time by those generals and their northern troops. Natives gradually entered these northern armies and reduced their percentage of northerners, but a gulf remained between the native population, including its gentry, and the alien military rulers. This reduced the striking power of the southern states.
On the other hand, this period had its positive element. For the first time there was an emperor in south China, with all the organization that implied. A capital full of officials, eunuchs, and all the satellites of an imperial court provided incentives to economic advance, because it represented a huge market. The peasants around it were able to increase their sales and grew prosperous. The increased demand resulted in an increase of tillage and a thriving trade. Soon the transport problem had to be faced, as had happened long ago in the north, and new means of transport, especially ships, were provided, and new trade routes opened which were to last far longer than the three kingdoms; on the other hand, the costs of transport involved fresh taxation burdens for the population. The skilled staff needed for the business of administration came into the new capital from the surrounding districts, for the conquerors and new rulers of the territory of the two southern dynasties had brought with them from the
north only uneducated soldiers and almost equally uneducated officers. The influx of scholars and administrators into the chief cities produced cultural and economic centres in the south, a circumstance of great importance to China's later development.