China enjoyed a respite from Western pressure from 1914 to 1918, when European powers were preoccupied by World War I. Chinese industries expanded, and a few cities, especially Shanghai, Canton, Tianjin, and Hankou (now part of Wuhan), became industrial centers. However, European powers’ preoccupation with the war at home also gave Japan an opportunity to obtain a position of supremacy in China. In 1915 Japan presented China with the Twenty-one Demands, the terms of which would have reduced China to a virtual Japanese protectorate. Yuan Shikai's government yielded to a modified version of the demands, agreeing, among other concessions, to the transfer of the German holdings in Shandong to Japan.
After Yuan died in 1916, the central government in Beijing lost most of its power, and for the next decade power devolved to warlords and cliques of warlords. In 1917 China entered World War I on the side of the Allies (which included Britain, France, and the United States) in order to gain a seat at the peace table, hoping for a new chance to halt Japanese ambitions. China expected that the United States, with its Open Door Policy and commitment to the self-determination of all peoples, would offer its support. However, as part of the negotiation process at the peace conference in Versailles, France, U.S. president Woodrow Wilson withdrew U.S. support for China on the Shandong issue. The indignant Chinese delegation refused to sign the Treaty of Versailles.
Young people in China who looked to the West for political ideals were crushed by the decisions at Versailles. When news of the peace conference reached China on May 4, 1919, more than 3,000 students from Beijing universities assembled in the city to protest. The Beijing governor suppressed the demonstrators and arrested the student leaders, but these actions set off a wave of protests around the country in support of the Beijing students and their cause.