How did the Sino-Japanese war affect China?
I assume you are talking about the war that happened in the 1890s rather than the one that happened just before WWII broke out.
The effect that this war had was to give Japan a great deal of power over China. The war gave Japan the same kinds of powers that the Western countries had, but it also gave Japan a great deal of territory. This made Japan much stronger and gave it a base on the mainland that it could use to try to gradually take more of China for itself.
This is exactly what would happen in the 1930s.
Japan had remained closed to the west until 1853. This isolation angered Americans who wanted to use its ports to supply their ships. The opening of Japan undermined the military government of the Shogun. After a civil war, the emperor was restored to power. Japan began modernizing along western lines. It developed a modern political system and began industrializing. It entered the imperial race by defeating China in 1895 and Russia in 1905. In the process it acquired Korea and Taiwan. Japan was just as brutal as any western power in dealing with conquered peoples.
China proved less successful than Japan in dealing with Western pressure. After its defeat in 1842, China was subjected to the treaty port system, which exempted foreign nationals from being subject to Chinese laws. The defeat in the Sino-Japanese War severely weakened the Chinese government and began a drive by the Western powers to create spheres of influence in China. In 1899 the Europeans and the U.S. agreed to follow the American “open door” policy. Opposition to Western dominance produced the Boxer Rebellion in 1900. The West sent a joint military force to crush the rebellion and China was required to pay a large indemnity.
The defeat of the Chinese at the hands of the Japanese revealed the incapability of the Chinese navy - the Chinese troops had no notion of of modern naval techniques, guns supplied onto the fleets were often of the wrong size and many of the ships had been filled with sand by scrupulous contractors. It was a crushing humiliation for China to have lost to one of their former tributary states. The war changed the landscape of East Asia. It was clear that Japan had, through the Meiji Restoration, not only successfully avoided the fate of being colonised by Western imperial powers, but had also joined them in seeking to colonise China. The tragic losses of the treaty (China was forced to recognise the independence of Korea, which effectively made Korea a Japanese protectorate, and had to cede the whole of Taiwan to Japan) also marked the failure of the Chinese self-strengthening movement. The Qing court was paralysed by their defeat and severely weakened.
She was defeated by Japan, a country she had originally looked down upon. This disastrous defeat brought to China a new wave of foreign imperialism. The Chinese government had exposed its own weaknesses to everybody. She was unable to resist anybody of anything. The avaricious foreign powers soon started to scramble on Chinese territories and sovereign rights. They sliced up the Chinese melon into different portions for further exploitation. The doom of China as a nation and the Chinese as a race became a nightmare to many people who were then affected by Social Darwinist ideas that the strong would become stronger and the weak weaker. The weak would then be cast away through the process of natural selection. Knowing of the grave dangers of their own nation, a new wave of intellectual awakening evolved out of the minds of the Chinese. The reform movement of Liang Ch'i-ch'ao and K'ang Yu-wei worked their way up to the hundred Days Reform. The reformers demanded a full-scale renovation of the Ch'ing government. Any resistance to change was considered detrimental to the existence of China. The revolutionary movement, on the other hand, led by Dr. Sun Yat-sen gathered momentum again after the Sino-Japanese War. The revolutionaries demanded not only far-reaching reforms but also the eradication of the Manchus. The Chinese revolutionary movement was both determined by the war and a determining factor for the future of China.
Moving in parallel direction was a chain of anti-foreign activities and riots in opposition to the imperialistic challenges as brought about by the war. The Boxer Uprising was the culmination of such anti-foreign feelings. The increasing intensity of anti-foreignism must be attributed to the further and the deepening erosion of Chinese sovereignty by foreign imperialism. The allowance given to Japan and the western powers to build factories in China was a direct affront to China's domestic industries. Chinese nascent industrial enterprises were much hampered by the presence of stronger and privileged foreign counterparts on Chinese soil. Hence, Chinese anti-imperialism became a norm and the driving force for the future development of China and Chinese nationalism.