The crises of the mid-nineteenth century—the defeat by the British, humiliating treaties imposed on China by Western powers, the Taiping rebellion, the Muslim rebellions, and, most humliating of all, the foreign occupation of Beijing in 1860—all combined to push the Manchu regime to pursue a course of reform. With increased contact with the West brought about the opening of Chinese ports, the new program of reform brought a high level of optimism to the Chinese and the Manchus. This period, from the late 1870's to the 1890's, saw such a flurry of innovation that the Chinese were not averse to referring to these changes as the "revival" or "renewal" of the Ch'ing and China.
The reform that they pursued, which they called "Self Strengthening," had two main components. The first involved learning Western technology, industry, and even language, in order to meet the Western powers as equals. The second component, however, was deeply Chinese and Confucian in nature. Conservative scholars and officials believed that the success against the rebellions and the new revival was largely due to the traditions and institutions of imperial government. They believed that Chinese political institutions, dedicated ideologically to the welfare of the common person (min ) , was the strongest and most moral form of government in the world. When properly administered, such as moral government produced a unity of purpose throughout the nation. In contrast to this, the Western powers were characterized by conflict, aggression, selfishness, anarchy, and disunity. What the times called for was a reform of the moral character of officials. Self-strengthening meant a return to the Confucian ideal of the chün tzu , the "superior man," who excelled in jen , or humaness and all the virtues associated with it. The transformation they sought, then, was a radical transformation of the inward man in order to make him worthy of authority.
...
Because of a weak imperial government under the Empress Dowager T'zu Hsi (1835-1908), who had concentrated power in her hands as a regent only by conceding authority to the eunuchs and regional governor-generals, power in the late nineteenth century was largely diffused to the regions. Under the rule of powerful Governor-Generals, such as Tseng Kuo-fan, Li Hung-chang, Chang Chih-tung, and Tso Tsung-t'ang, the various regional governments began to rebuild themselves after the devestations of the mid-century. They rebuilt infrastructure, reforested, built refugee centers, and dispersed food. As a result of these efforts, most regions in China had recovered by the mid-1890's.
These regional Governors-General were the primary practitioners of self-strengthening. Because they were primarily responsible for the defense of the country with their personal armies, they were the ones that principally adopted Western technologies and practices. Beginning in the 1860's, they began to build arseanals all throughout China and in the 1870's, they began to build commercial industries. The Kaiping Coal Mine was established in 1876 and, the same year, the first telegraph company was established in China. Soon there followed a railroad and cotton factories. These nascent industries were administered by a principle called "government supervision with merchant operation." Major decisions were handled by officials, but the day to day running of the companies was in the hands of merchants.
http://wsu.edu/~dee/CHING/SELF.HTM