Military and economic exhaustion affected both countries. Japanese historians regard this war as a turning point for Japan, and a key to understanding the reasons why Japan may have failed militarily and politically later. After the war, acrimony was felt at every level of Japanese society and it became the consensus within Japan that their nation had been treated as the defeated power during the peace conference. As time went on, this feeling, coupled with the sense of "arrogance" at becoming a Great Power, grew and added to growing Japanese hostility towards the West, and fuelled Japan's military and imperial ambitions. Furthermore, Japan's substantiated interests in Korea and Liaodong led to the creation of a Kwantung Army, which became an autonomous and increasingly powerful regional force. Only five years after the war, Japan "de jure" annexed Korea as part of its colonial empire. Two decades after that, the Kwantung Army staged an incident that led to the invasion of Manchuria in the Mukden Incident; the Kwantung Army eventually came to be heavily involved in the state's politics and administration, leading to a series of localized conflicts with Chinese regional warlords that finally extended into the Second Sino-Japanese War in 1937. As a result, most Chinese historians consider the Russo-Japanese War as a key development in Japan's spiral into militarism in the 1920s–30s.