Although Shih Lo had long been much more powerful than the emperors of the “Earlier Chao dynasty”, until their removal he had not ventured to assume the title of emperor.  The reason for this seems to have lain in the conceptions of nobility held by the Turkish peoples in general and the Huns in particular, according to which only those could become shan-yue (or, later, emperor) who could show descent from the Tu-ku tribe the rightful shan-yue stock.  In accordance with this conception, all later Hun dynasties deliberately disowned Shih Lo.  For Shih Lo, after his destruction of Liu Yao, no longer hesitated:  ex-slave as he was, and descended from one of the non-noble stocks of the Huns, he made himself emperor of the “Later Chao dynasty” (329-352).

Shih Lo was a forceful army commander, but he was a man without statesmanship, and without the culture of his day.  He had no Chinese education; he hated the Chinese and would have been glad to make north China a grazing ground for his nomad tribes of Huns.  Accordingly he had no desire to rule all China.  The part already subjugated, embracing the whole of north China with the exception of the present province of Kansu, sufficed for his purpose.

The governor of that province was a loyal subject of the Chinese Chin dynasty, a man famous for his good administration, and himself a Chinese.  After the execution of the Chin emperor Huai Ti by the Huns in 313, he regarded himself as no longer bound to the central government; he made himself independent and founded the “Earlier Liang dynasty”, which was to last until 376.  This mainly Chinese realm was not very large, although it had admitted a broad stream of Chinese emigrants from the dissolving Chin empire; but economically the Liang realm was very prosperous, so that it was able to extend its influence as far as Turkestan.  During the earlier struggles Turkestan had been virtually in isolation, but now new contacts began to be established.  Many traders from Turkestan set up branches in Liang.  In the capital there were whole quarters inhabited only by aliens from western and eastern Turkestan and from India.  With the traders came Buddhist monks; trade and Buddhism seemed to be closely associated everywhere.  In the trading centres monasteries were installed in the form of blocks of houses within strong walls that successfully resisted many an attack.  Consequently the Buddhists were able to serve as bankers for the merchants, who deposited their money in the monasteries, which made a charge for its custody; the merchants also warehoused their goods in the monasteries.  Sometimes the process was reversed, a trade centre being formed around an existing monastery.  In this case the monastery also served as a hostel for the merchants.  Economically this Chinese state in Kansu was much more like a Turkestan city state that lived by commerce than the agrarian states of the Far East, although agriculture was also pursued under the Earlier Liang.