The First Sino-Japanese War was Japan's first foreign entanglement after the Meiji Restoration, and it ended with a decisive victory for the nascent empire, whose power and influence would only grow in the years to come. The Qing dynasty, besides being once again humiliated on the international stage, was forced to relinquish its suzerainty over Korea, cede Taiwan to Japan, and pay a crushing indemnity of 230 million taels of silver.

One of the biggest reasons for the Chinese defeat was that its military, especially the navy, was plagued with incompetence and corruption. As a result, even though the Beiyang Fleet was, on paper, far larger and more powerful than anything the Japanese navy had to offer, it was far less prepared for combat than its opponent. The result was the Battle of the Yalu River, in which the Japanese navy scored a decisive victory and secured its supremacy over the seas for the rest of the war.

Despite all its weaknesses (such as faulty shells that didn't detonate properly, confusing signals, inexperienced crews, etc), however, the Chinese still managed to damage six Japanese vessels, four of them severely. So, what if, through the power of handwavium and some luck, the Chinese navy has a teeny tiny bit more luck when it comes to corruption in the years that preceded the war? Let's say Empress Dowager Cixi doesn't divert funds from the navy to refurbish one of her palaces, assuming that story did happen and wasn't a fabrication.

What would be the consequences of a decisive Chinese victory at the Battle of the Yalu River? The ensuing Chinese naval dominance means Japan will have a much harder time supplying its troops in Korea, so I can see them being slowly pushed out of the peninsula in the following months. Following this the Japanese will likely have no choice but to sue for peace, not only due to their losses on land and at sea, but because their economy wasn't ready for the expenses of a long war.

So, what could be some of the consequences of a Qing victory in the war? For starters they won't have to pay an indemnity, which should do wonders for their economy. They should also earn some prestige from their victory, even if Japan wasn't seen as a power equal to France and Britain, two countries with which the Chinese crossed swords during the 19th century. Would the Guangxu Emperor's reforms have a better chance of succeeding ITTL, and will the Boxer Rebellion be averted? My guess would be a yes to both, since the loss to Japan did a lot of damage on the economic and psychological level.
 
Some more thoughts:

A Japanese defeat in this war averts the Triple Intervention and, of course, the Russo-Japanese War. How does this affect relations between the European powers, and which one of them are the Qing likely to get close to in order to continue their modernization? Perhaps Germany, since AFAIK they didn't wage any wars against them, unlike Britain, France and Russia?

On the domestic front, assuming the Guangxu Emperor's reforms are implemented in a better way and he avoids getting couped by Empress Dowager Cixi, his assassination via arsenic poisoning will be butterflied away for obvious reasons. He was 37 years old at the time of his murder (1908), so he'll probably live until the 1920 or 1930s. Should he still be succeeded by Puyi, he'll likely be a very different man compared to OTL: his early accession to the throne made him a spoiled and cruel child.
 
Very interesting. Japan certainly has less prestige and might lean even more on the Navy as an institution. China I think, still has a revolution to overthrow the Qing but it will be a more stable government.
 
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