The late Qing era witnessed a growing awareness of the necessity for fiscal modernization as part of the modern nation-building process. Fiscal reform efforts included the introduction of a Western budget system, enforcement of indirect taxes on the industrial and commercial sectors, and a break from the dependency on a land tax. The 1898 Hundred Days’ Reform furthered discussions on financial modernization, as unfolded in the “Basic Principles of the New Policy” (Xinzheng shiji), written by He Qi and Hu Liyuan in 1898, on the necessity of a division between state and local taxes. After an aborted attempt, the Guangxu emperor ordered a compilation of the government budget for the first time in 1899. However, Sheng Xuanhuai's memorial about compiling an annual budget was not accepted by the imperial court amid the conservative atmosphere that dominated after the failure of the Hundred Days’ Reform.

The start of the New Policy reform paved the way to full-scale modernization. Zhang Jian, a prominent reformer, in his 1901 publication “Discussion on the Reform” (bianfa pingyi), counted “the creation of a budget” as one of the twelve urgent tasks for the Board of Revenue (hubu). The Finance Office (caizhengchu), an institution separate from the regular bureaucracy, was finally established by the Qing court in 1903. The first government bank acting as the public treasury, Hubu Bank, was opened in 1904, with a total capital of 4 million taels.