China : Report for the year 1901 on the trade of China

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No. 2912 Annual Series.
DIPLOMATIC AND CONSULAR REPORTS.

CHINA.

REPORT FOR THE YEAR 1901

ON THE

TRADE OF CHINA.

REFERENCE TO PREVIOUS REPORT, Annual Series No. 1984.

Presented to both Houses of Parliament by Command of His Majesty
NOVEMBER, 1902.

LONDON:

PRINTED FOR HIS MAJESTY'S STATIONERY OFFICE,
BY HARRISON AMD SONS, ST. MARTIN'S LANE,

printers in ordinary to his majesty.

And to be purchased, either directly or through any Bookseller, from
EYRE & SPOTTISWOODE, East Harding Street, Fleet Street, E.C*
and 32, Abingdon Street, Westminster, S.W.j
or OLIVER & BOYD, Edinburgh;
or B-. PONSONBY, 116, Grafton Street, Dubl:*,

1902.

LCd. 786—216.]

Price Threepence


CONTENTS.

Page

I. General summary ........................................................................................................................................................................3

Total trade .........................................................................................................................4

Balance of trade..................-.....................;.......................................................................6

II. Imports of merchandise........................................................................................................H

General remarks.........'......."...........................................................................11

Cottons........................................................................................................................................14

Tarns ................................................................................................................................................................................................15

Woollens ..........................................................................................................................................................................................16

Opium ......................................................................................................................................................................................................17

Morphia ................................................................................................................................................................................................18

Kerosene oil............................................................................................................................................................................18

Sugar .................................................................:..................................................................19

Metals .........................................................................................................................................19

Sundries ..............................................................................................................19

Cigarettes.................................................................................................................................20

"Wines ......'.......................................................................................................................................................................................21

Flour......................................................................................................................................................21

Bice ................................................................................................................................................................................................21

Iiidigo ......................................................................................................21

, Coal ...,...........................................................................-......*.................' 21

Annex on the subject of Chinese yarn .....;..............................................22

III. Exports of merchandise.......................................................................................................24

General remarks.................................................... ........................................................24

Silk ................................................................................................................................................................................................................24

Tea ......................................................................................................................................................................................................24

Haw cotton......................................................................................................................................................................................33

Bean products..........................................................................................................33

Hides ..................................................................................................................................................................................................34

Skins................................................................................................................................................................................................................34

Strawbraid ......:......................................,....................,:...„...... ...... 34

MatB.....................................................................................................................................................................................35

Sugar ........................................................................................................................................................................................................35

Miscellaneous............................................................................................................................................................................35

Sesamum seed..............................................................................................................................................................................35

"Wool................................................................................................................................................................................................................35

IV. Inland trade...........................................................................................................................................37

(a) Distribution of foreign imports........................................................................................................37

Likin..............................'."......................................................................................................................41

(b) Collection of native produce ..............................................................................................................42

(e) Internal native trade ........................................................................................................................................43

V. Shipping ...................................................................................................................................................................................47

V I. Inland steam navigation ................................................................................................................................................49

VII. Emigration .................................................................................................50

VIII. Revenue ................................................!.....................................................................................................50

IX. Mines and railways...................................-.....'...;...............................1............51

X. Suggestions for extension of trade ................................................................................................................53

Note.—The average value of 1 Haikuan tael in 1901 was 2s. lli<£.( but
exchange fluctuates according to the price of silver.
1 picul = 133jt lbs.

The agents for the Chinese customs returns are F. S. King and Sons, 2 and 4,
Great Smith Street, Westminster, S.W.


No. 2912. Annual Series.

Reference to previous Report, Annual Series No. 1984.

Report on the Trade of China for the Year 1901 by Mr. J. W.

Jamieson, British Commercial Attache for China.

(Received at Foreign Office, September 16, 1902.)

I.—General Summary.

m.

Although in the course of the year under review, trade in some
parts of the Empire, had to be carried on under, or was restricted
by, the abnormal conditions, arising out of the troubles of 1900, it
may prove not to be without interest to compare the statistics of
1901 with those of- 1896, the year in which commerce recovered
from the shock dealt it by the war with Japan.

As will be seen from the table given below, the total foreign
trade of the country has, since that date, increased by close on
9,000,000/. Imports for which more silver had to be paid, owing
to a fall in the value of that metal of over 11 per cent., show an
increase of over 5,500,000/., while exports show an increase of
3,313,000/.

It will be noted that the ratio of exports to imports shows a
slight decrease. But it must not be forgotten that the direct
foreign export trade of the two ports of Tientsin and Newchuang,
in 1899, exceeded by 1,528,000/. the figures for 1901, and, had
trade gone on developing peacefully, last year's total of exports
might well have amounted to 29,500,000/., which would have given a
ratio of 100: 83'7 per cent., or practically the same as in 1896. These
figures add another to the many illustrations, cited by Lord
Herschell's Committee, to prove that falling exchange, in the long
run, has not the tendency to stimulate exports or check imports.

(179)


â– 4

CHINA.

Tabic A.—Comparative Table of China's Foreign Trade based
011 the Eetunis of the Imperial Maritime Customs.

"Value. Increase
1896* 1901.+ Decrease.
Total imports „ exports £ 29,605,100 24,488,181 £ 35,185,275 27,801,660 £ + 5,580,175 + 3,313,479
Total trade . • 54,093,281 62,986,935 + 8,693,654
Ratio of imports to exports as 100: ...... Per cent. 82 '7 Per cent. 79
United Kingdom— Imports i'rom .. Exports to .. Hong-Kong— Imports from India—■ Imports from Exports to .. Other British dominions — Imports from £ 7,378,400 1,863,650 15,226,000 9,008,500 3,838,000 362,600 895,0C0 531,650 £ 6,100,000 1,266,300 17,798,250 10,664,250 4,282,500 465,650 892,700 493,970 £ - 1,278,400 - 597,350 + 2,572,250 + 1,655,750 + 444,500 + 103,050 2,300 - 37,680
Total British trade .. 39,103,800 41,963,620 + 2,859,820

* At exchange, 3s. id. = 1 Haikuan tael.
f At exchange, 2s. llif?. = 1 Huikuun tael.

[Note.—As regards the above table, attention has to be called
to certain defects in the method, according to which the returns of
the Imperial Maritime Customs are compiled.

The figures showing the total foreign trade of the country
represent the value of imports at moment of landing, and of exports
at moment of shipment. These figures are arrived at by the follow-
ing process:—From the market value of the net imports is deducted
the total collection of import duty, plus the likinon opium, payable
at port of entry, and 7 per cent;, for charges, &c. To the market
value of exports is added the total collection of export duty and
8 per cent, for charges, &c.

In the case of the figures showing the proportion of trade with
each foreign country, however, no such deductions or additions are
made, and the requisite data not being available, it is not possible,
except approximately, to reduce the two sets of figures to a
common level.

No attempt has therefore been made to do so, and all statistics
given in this report, other than those dealing with the total trade,
are taken from the customs returns as they stand.


CHINA. 5-

It does not,, on the face of things, appear sound to fix a profit
011 goods the prices of which are constantly fluctuating, and the
value of which is, in many cases, arbitrarily assessed by the customs
themselves.

To ensure accuracy and to facilitate comparison, it would seem
desirable that the figures for imports and exports be throughout
calculated on one and the same basis. Further allowances have to
be made in respect of the figures showing the proportional trade of
each nationality. Certain goods carried on British ships, for in-
stance, may be entered as coming l'rom or going to the United
Kingdom, whereas their real provenance or destination may be
Home other country.

Another point not to be lost sight of, is the deceptive nature of
the returns in respect of goods imported from and exported to
Hong-Kong. A great deal of non-Britisli optional cargo is brought
on from that colony, and large quantities of purely Chinese pro-
duce is sent there from the southern ports for transhipment to
other ports in ChinaJ.

The aggregate of British trade, which in 1896 formed 56 6
per cent, of the whole, has, according to the Chinese returns,
declined to 51-02 per cent., and direct imports from the United
Kingdom would appear to have fallen off to the extent of
15'9 per cent.

What the true figures may be, it is almost impossible to
ascertain, as neither the Chinese tables nor our own can be said
to furnish accurate data with regard to the place of origin of
goods therein enumerated.

The returns, for instance, given for the year 1896, in the
Board of Trade's Annual Statement of the trade of the United
Kingdom with foreign countries, put the exports to China at
6,717,353/., and the imports from China at 2,973,887/. These
values are the values at ports of shipment and values on arrival
respectively. The import figures, if reduced to a common basis,
practically agree, but the large difference of 1,110,237/. in the
case of exports is less easy to account for.

A not unlikely solution is that the excess is made up of
optional cargo, or of transhipments at Marseilles, which may have
been classed in the Chinese returns as shipments to the Con-
tinent of Europe, and properly recorded in our own returns as
imports from China.

At the time of writing the British figures for 1901 have not
been received.

As regards other countries the comparative figures for the
two years are:—

(179)


â– 6

CHINA.

Value.
Increase.
1896. 1901.
United States— Imports from Exports to .. Continent of Europe (exclud- ing Russia) 8— Imports from Exports to .. £ 2,000,000 1,854,000 1,572,000 3,013,000 £ 3,476,000 2,458,00J 2,521,500 4,329,000 £ 1,476,000 604,000 949,500 1,316,000

* In 1900 Hamburg imported from China 1,426,0002. and exported to China
1,464,000Z. worth of goods. (German trade returns.)

Imports from Japan allow an increase of roughly 2,000,000^.
to 2,500,000/.

From the above it will be seen that in spite of a consider-
able fall in the value of silver, and in spite of the fact that in
terms of her treaty with Japan, China in 1895 added some
37,500,000/. to her foreign debt, the import trade has in five
years increased by 19 per cent., a percentage which had it not
been for the late outbreak would probably have been exceeded.

The present year, however, finds China saddled with a further
addition to her debt of 67,500,000/., originally converted from
gold into silver at 3s. per Haikuan tael ( = 450,000,000 taels),
the silver equivalent of which, along with that of her previous
debt, is being augmented to a very disquieting extent by declining
exchange. The shrinkage moreover in her receipts, caused by the
mortgaging of the major portion of her revenues for the service of
the indemnity claims, is bound to lead to heavy internal taxes on
trade, and one may assume that her purchasing capacity for some
time to come will be seriously affected, thereby.

While it is true that it is the unexpected which is for ever happen-
ing in this country, yet the situation with which she is confronted
does not disclose a bright prospect. Her only hope of economic
salvation would seem to be an immediate and extensive develop-
ment of her exports. But large as are her potential resources, in this
respect, an effective exploitation thereof is bound to take time.
More railways than those at present in course of construction or in
contemplation are required, and granted that capitalists will come
forward to finance them they cannot be constructed in a day. In
their absence, it will be difficult to convey machinery for mining
or industrial purposes to its destination, orMto lay down minerals or
other products at a distributing port at prices which will prove
remunerative. Minerals are not usually found in plains, such as
those of North China and the Yangtzu delta, and the experience of
the Anglo-French Quicksilver and Mining Syndicate, who, on
starting work in the province of Kueichou, had to employ 30 men
for six weeks to convey a boiler over a distance of 17 miles, Is not
likely to prove an unusual one.


CHINA.

7.

Another aid to the development of exports would be the. com-,
plete abolition of all internal and maritime duties on produce for;
shipment abroad. The adoption of such a course, however, is
improbable. In the first place, rudimentary knowledge of the,
principles of economics is lacking in the minds of most Chinese
officials, and, even could a faint perception thereof be instilled,
the dire straits for ready money, in which they find themselves,,
would be sufficient reason to prevent them from giving up the,
revenue of a day, on the theoretic assurance that it would be made
good, with interest, at no very distant date. It the second place
the maritime export duties are pledged to European creditors, and
and as they amount to about 1,300,000^., some other equivalent,
security would have to be substituted therefor.

Evidence of a realisation that something must be done is
afforded by the fact that, in March of this year (1902) the
Chinese Foreign Office published a set of mining regulations,
which, while being still far from satisfactory, constitute a con-
siderable advance on previous legislation of the kind. It is now
thereunder possible for foreigners to work mines, in conjunction
with Chinese, without any arbitrary restrictions as to proportion
of joint capital. The people and the officials are instructed to
afford every assistance to prospecting parties, and an attempt is
niade to lay the bogey of feng shui. A further indication of pro-
gressive thought is the acceptance of a proposal made by the
British Treaty Bevision Commission, that the export duties on
tea be- re-adjusted on the basis of 5 per cent, ad valorem, in the
hope that it may yet be possible to do something towards reviving
this onoe flourishing trade.

- Many attempts^—all unfortunately abortive—have been made
to arrive at some conclusions with regard to the balance of
China's trade. The only approximately accurate figures available
are those given in the returns of the Imperial Maritime Customs.

The data, which they furnish, are, however, far from complete,
and as regards the rest one has to fall back on guesswork.

One feels sure that the trans-frontier trade in the North,
North-West and West of China must show a balance in China's
favour. One knows that emigrants returning from abroad bring
with them large sums of money, the amount of which one has
no means of gauging, and that every mail steamer brings hundreds
of registered letters, containing part payment of labour exported.
One goes over the list of the various men-of-war belonging to the
Western. Powers in Eastern waters, and in vain attempts to esti-
mate what their annual expenditure on the China station is.
Similarly, is it impossible to compute what the various military
contingents have spent or are spending in the country. One can-
not be wrong in including in the credit side of China's account a
certain proportion of the wealth flowing into the adjacent colony
of Hong-Kong; but how is this proportion to be assessed ? One
meets concession hunters and representatives of prospecting syndi-
cates by the score, and whether their objects be attained or not,
they all leave money behind. The contributions of those


â– 8

CHINA.

interested in missionary enterprise is yet another item to be taken
into consideration.

On the other hand it has to be borne in mind that on the
debit side of the account there have to be included the largo
annual payments for the service of the foreign loans. Tin;
amounts due in 1901 were 3,750,000/., of which only 910,442/.
represented repayment of capital, leaving a balance in respect
of interest of 2,839,558/.

China has no trans-oceanic steamship service of her own, and
of the total tonnage, engaged in the inter-Treaty port carrying
trade only a little over 17 per cent, being under the Chinese
Wag, she has not only to pay freight on her exports to outsiders,
but the major portion of freight on her home trade as well.

Table B (1).—Imports and Exports during the Years 1891-1900.

1891-95.

Year. Imports. Exports.
Merchandise. Silver* Merchandise. Gold* SUver*
1891 1892 1893 1894 1895 £ 28,276,500 25,425,309 25,444,480 22,316,533 24,571,234 £ 2,127,037 4,224,151 5,999,526 £ 28,406,936 25,519,430 25,977,963 23,135,328 26,280,612 £ 850,000 1,830,003 2,200,000 2,030,707 1,023,000 £ 769,922 1,050,442
Total .. 126,034,056 12,350,714 129,320,269 7,933,707 1,820,3C4

1896-1900.

Year. Imports. Exports.
Merchandise. Silver.* Merchandise. Gold*
1896 1897 1898 1899 1900 Total £ 29,605,100 26,501,469 26,616,025 35,214,824 28,849,700 £ 286,666 244,522 682,250 191,378 350,954f £ 24,488,181 27,086,572 25,559,812 32,754,838 27,422,242 £ 1,665,00) 1,485,500 1,180,40 > 1,037,250 736,180 .
146,787,118 1,755,770 137,311,645 1 6,104,330

* Net. f Avernge previous four years.


china.

9-

Table E (2).—-Payments due by China in respect of Interest and
.Redemption of Foreign Loans during the Years 1891-1900.

Year. Amount.
Redemption. Interest.
1891 ........ 1892 ........ 1893 ........ 1894 ........ 1895 ........ Total, 1891-95 .. 1896 ........ 1897 ........ 1898 ........ 1899 ........ 1900 ........ Total, 1896-1900 £ 252,000 312,000 337,000 337,000 325,000 £ 126,310 89,770 67,242 44,027 292,762*
1,563,000 620,111
229,078 404,191 391,331 553,860 777,417 1,386,625 1,910,537 2,184,053 2,692,273 2,836,981
2,355,877 ll,010,469t

* 1H.450Z. silver loan at 3s. + 572,250/. silver loan at Zs.

If one goes back to the beginning of the decade, and divides
it into two periods of five years, the one—1891-95—terminating
with the close of the Japanese war, and the other—1896-1900—

1891-95.
Value.
Exports, including gold and silver £ 139,074,340 138,384,770
Excess exports oyer imports .. Deduct interest pajablo 689,570 620,111
Balance in favour of China 69,459
1896-1900.
Value.
Imports, including silver Exports „ gold £ 148,542,888 143,415,975
Excess imports over exports ., 5,126,913 11,010,469
Bfllanoe against. China ,. .. 16,137,382


â– 10

CHINA.

concluding with the suppression of the Boxer rising, one finds
that, at the end of the first five years, China had a balance in
her favour, as far as her foreign trade was concerned, of 09,459/.,
whereas that at the end of the second quinquennial period this
favourable balance had been converted into an adverse one of
16,137,382/. (Vide Tables B (1) and (2).)

[Note.—Table B (1). Up to 1893, the year of the closing of
the Indian Mints, China was an exporter of silver. Since then
she has been an importer, until 1901, when, she exported
900,000/. worth of that metal. In the column, imports of silver,
the import for 1900 is given as 350,954/., that being the average
import for the four years 1896-99. As a matter of fact, China
actually imported in that year 2,396,655/.* This abnormal
increase being due to the enormous quantities of dollars imported
for the use of the foreign military contingents, may, for purposes
of statistical comparison, be written down. The export of 1901
was probably due to a part return of these excessive imports,
rendered possible by the withdrawal of the allied forces, the
dollars, which passed into circulation throughout North China, in
1900, setting free a corresponding amount of silver, which was
available for export abroad. Exchange having occasionally fallen
below the parity of silver, India came forward as a purchaser of
Chinese silver.]

The trade balance for 190.1, worked out on the same basis, is
as follows:—

In 1902, to China's other obligations has to be added a
sum of 18,829,500 taels in respect of indemnity payments.
Converted at 3-s. this represents 2,824,425/., which China has to
pay in gold. At present, however, the Haikuan tael is only worth
2s. 7tV^., which makes the silver equivalent 21,822.519 taels,
or an increase of 16 per cent, in the amount, for which she
expected "to have to provide.

To go back to the figures in Table B (1), a comparison of4the
trade of 1891 with that of 1900 shows that the volume of trade

* This does not include further large sums imported by ships of war and
Government transports, of which the customs authorities necessarily could not
have cognisance.

Value. Total.
£ i ' £
Imports ... ! 35,185,275
Exports .. 27,801,660
>. gold ...... 1,500,000
„. silver 900,000 *. •
30,201,660
Excess imports over exports .. 4,983,615
Add interest payable •• 2,839,558
Balance against China 7,823,173


12

china.

records, and showed an advance without precedent." (Customs'
report for 1899.)

Nevertheless, in 1901 China could afford to import goods, the
sterling value of which fell below the sterling value of the impor-
tations of 1899 (39,850,150/.) to the extent of 163,675/., but for
which she had to pay 3,554,462 taels more in silver. A com-
parative table of the quantities of cotton and woollen goods
imported during 1899 and 1901 is given below.


china. 13-

Table C.—Comparative Table of Imports of Cotton and Woollen
Goods d 11 ring the Years 1899 and 1901.

Quantity.
Articles.
1899. 1901.
Cotton Goods.
Shirtings—
Pieces 5,130,896 4,121,655
White ...... »» • • 2,753,532 2,476,840
„ figured, brocaded and
spotted .. .. » 56,682
Dyed, plain .. » • • 118,189 169,815
„ figured, brocaded and
ejiotted ,. ii • • 85,949 174,172
Japanese .. ji • • 8,630 14,029
T-cloths........ ii * • 1,199,203 918,110
„ Indian ii • • 83,937 15,320
„ Japanese ii • • 242,652 298,608
Drills-
English ii • ■ 78,887 78,616
4,460 1,019
Dutch ...... i> 40,170 32,928
ii • • ] ,626,107 1,649,626
Japanese ii • • 9,577 23
Jeans—
1) * * 76,016 41,083
Dutch >) • 30,690 14,440
126,303 : 97,368
Sheetings— 1 397,443
English ...... ii •» 763,762
40,532 2,620
Dutch ...... >1 • 45 1,262
3,975,903 2,840,518
Japanese .. .. >) • ■ 31,820 13,006
Chintzes, furnitures and plain -
cotton prints.. ., .. m • 520,541 1 395,667
)> • 24,037 ; 55,883
Turkey-red cottons »> • ■ 322,970 192,930
Cotton lastings, plain and i .
figured .. .. It * • 940,672 i 1,614,103
Cotton damasks .. j> • 17,054 23,507
Velvets .. . • 1) • 30,853 53,431
Velveteens .. „ 2,424 6,065
Jaconets, cambrics, lawns, mus-
lins and dimities .. •. >1 " • 247,171 260,402
Handkerchiefs .. .. Dozens .. 678,356 430,183
„ Japanese ii ■■ 21,739 j 26,675
Towels .. .. ii • • 550,038 ! 202,616
,, Japanese ■ • . • i* • • 209,062 294,176
Cotton flannel .. Pieces 397,469 371,087
„ Japanese ii • • 176,676 164,255
Japanese cotton cloth.. .. ii • • 181,016 112,268
„ crape.. .. ii • • 73,069 102,665
Yarn— i 58,703
English .. . • • • Piculs | 52,556
Indian .. •• •• in 1,906,426 ! 1,716,983
Japanese 1 ii • • 779,700 498,116
)i • • 3,815 ' 5,208
i 3,446


14

china.

Comparative Table of Imports of Cotton and Woollen Goods
during the Years 1899 and 1901—continued.

Cottons. a matter of fact, during the last decade, the trade in cotton

goods as a whole has reinaiued practically stationary, the falling-
off in one class being made good by an increased import of another.
There has been an advance in the import of—:

Quantity.
Articles.
1891. 1901.
Pieces. Pieces.
American drills 661,591 1,649,626
„ jeans.. 17,317 97,368

and a marked decrease in the import of Indian T-cloths: 1894,
249,235 pieces ; 1901, 15,320 pieces.

The import of Japanese T-cloths, cotton flannel (American and
Japanese), and Japanese yarn has advanced rapidly and to a large
extent.

The figures are—

Quantity.
Articles.
1899. 1901.
Woollen Goods.
Camlets—
English ..... PieceB 61,968 59,883
Dutch .. .. .. » 125 5
Lasting n • • ■55,908 23,188
Long ells 102,096 95,485
Spanish stripes.. d 37,988 46,058
Cloth, broad, medium, habit,
and Russian .. i» 16,622 23,298
Iiustres and Orleans, pluin ft * * 2,693 5,117
„ „ figured .. n 3 524
Blankets Pairs . 52,861 28,175
Union or poncho cloth Pieces 3.943 6,668
Flannel i) 2,195 3,770
Italian cloth is â– 1 Piculs 50,746 82,489
Yarn and eord 4,836 4,465

Articles. Quantity.
1894. 1901.
Japanese T-cloths American cotton flannel Japanese ,, ,, „ yarn .. Pieces » • • Piculs 2,154' 47,611 68,685 31,104 29P.608 164,255 371,087 471,531


CHINA.

15-

The demand for Italian cloths—cotton and woollen—has also
grown in a marked degree, the reason being that the finish of
these goods has been so improved in recent years that they are
being widely used in place of silks.

Low exchange is creating a demand in sheetings and drills for
goods of a lower quality than hitherto imported. And in Northern
and Central China American competition is making itself felt in
certain classes of grey goods, which made their appearance J'or the
first time last year. A fair share of the American trade is in
the hands of British importers, but the Lancashire manufacturer—
seeing how completely he was cut out in heavy grey goods in the
north of China—cannot fail to regard this state of things with
apprehension. Competition was formerly restricted to 14-lb.
cloths, but the American manufacturer is now cutting into
Lancashire as low as 10 lbs., and must continue to do so, so long
as he enjoys present advantages in the matter of geographical
location, improved machinery and transport rates,

The transfer of the mills in the North-Eastern States to the
South, in the centre of the cotton country, and the more
advantageous rates of freight, obtainable from New Orleans and
New York, must tell very greatly in favour of the American as
compared with the British manufacturer, who has to procure his
raw material from across the seas, take it inland at heavy cost,
and when made up take it back to the coast for shipment abroad.
The trade in otiier than grey goods must, for some time to come,
until the Americans acquire the knowledge, born of long ex-
perience, hold its own.

Prior to 1S89 the customs returns did not sub-divide imported Yams,
yarns according to country of origin, so that it is hardly possible to
say when exactly Indian yarn finally attained its supremacy over
Lancashire yarn in this market. As is the case in India, the
import of British yarn into China is now entirely confined to the
higher counts, the extreme range being 24's to 40's, and the
average 28's to 32's. The volume fluctuates between 50,000 to
70,000 piculs per annum, and there is not likely to be any
substantial decrease until Japan or India take to spinning higher
counts than they spin at present.

Japanese yarn appeared, for the first time, in 1894 with an
import of 31,103 piculs, and steadily gained favour year by year,
until in 1899 the market was flooded with the over-production of
Japanese mills to the extent of 780,000 piculs. This was followed
by a sharp fall of 40 per ccnt., and last year the import may be
said to have been normal. There are., however, indications that
over-production in Japan still continues, and that, as China is
her only market, she will again flood this country with her surplus
stocks. Japan spins for the China trade, principally 16's, using
Chinese and Indian cotton. Chinese cotton is whiter, and,
generally speaking, somewhat longer in staple than Indian cotton.
It also absorbs dyes more thoroughly than the latter, and the
value of yarn spun therefrom commands a price, count for count,
6 to 7 per cent, higher than that of Indian yarn. The question


â– 16

CHINA.

therefore of how the Chinese mills will eventually affect the output
of the Indian mills is one of great interest, seeing that 95 per
cent, of the Indian export of yarn is at present absorbed by China.
In Annex A to this section will be found some valuable notes
bearing on this subject.

There are about 14 mills in China, say some 460,000 spindles,
spinning 10's, 12's, 14's and 16*'s, and their total out-turn may be
set down at 60,000,000 lbs., about half of which is consumed in
the Shanghai district, the balance going to ports up the Yangtzu
and to North China. This yarn pays, on export from Shanghai
to another treaty port, a duty of 0'70 Haikuan tael per picul, the
equivalent of the former full import duty on imported yarn.
Seeing that Chinese raw cotton is subject to the full incidence
of internal taxation, and cotton, imported from abroad, pays import
duty, this tax is not a popular one as far as the millowners are
concerned.

The only charge on cotton spun in Japan is export duty from
China—if it be Chinese cotton—but it has to be borne in mind
that this cotton has paid the sa.me internal taxation as the cotton
spun in Chinese mills, so that really Japanese yarn, spun from
Chinese cotton, pays a surtax of 0'70 tael per picul in the shape
of export duty, in addition to freight to and from China. It on
the other hand enjoys compensation in the matter of coal, which
is all produced in the country, and which, on going to China, pays
freight and import duty. Indian yarn, although free from export
duty and internal taxation, is handicapped by freight and
insurance charges. \

Last year's returns includc 498,116 piculs of Hong-Kong yarn,
the output of a spinning mill established in that colony with the
original intention of spinning Borneo cotton. As, however, cotton
growing in Borneo has not yet got beyond the experimental stage,
the Hong-Kong mill spins a mixture of Burman and Indian cotton,
on which no duty is payable. The export so far has been prin-
cipally to North China, being a set off in settlement of accounts
between southern buyers of groundnuts and bean cake and their
northern creditors. The yarn is said to be greatly appreciated,
and an increased demand therefore may not unreasonably be
anticipated.

Woollens. The trade in woollen goods has been a steadily declining one

for many years past, and in certain articles, such as Orleans,
lustres and figured lastings, has completely died out. In 1886
the total import of woollen goods amounted to 695,066 pieces,
value 5,639,071 Haikuan taels (1,406,830/.), whereas in 1901 it
fell to 351,950 pieces, value 4,727,371 taels (699,105/.).

While exchange has risen, the gold price of woollen goods has
fallen, and it is to be assumed that the increasing variety and
•comparative cheapness of cotton goods is responsible for this state
of things.

In the cold climate of the north the poorer classes find it
more economical to wear wadded clothes or sheep-skins. Only
the upper middle classes, in contact with Europeans, in Central


CHINA.

IT

China, appreciate; the advantages of woollen fabrics, and in.
Southern China the need for warm clothing is not groat.

The frequent wnshings, too, to which native clothing is sub-
jected, may, owing to ignorance of how to deal with them, have
created a prejudice against woollen goods.

It is a very common assumption that the native of China loves-
dirt and never washes himself or his clothes. Exactly the converse
is the case, the standard of personal cleanliness amongst the lower
class Chinese being very much higher than in the United Kingdom
or Europe.

Seeing the number of pairs of blankets India absorbs in one
year—1900: India, 1G2;900 pairs ; China and Hong-Kong, 09,500
pairs—one might not unreasonably look for an increased import
into China.

Notwithstanding the steady increase in the cultivation and Opium.-,
consumption of native opium, Indian opium continues to hold
its own, the import for the last five years having remai?'
stationary:—

Apprehensions are entertained that, if the present adverse
Qourse of exchange continues, the import from India will receive a.
serious check, and that the closer scrutiny and control, which it is
possible to exercise in respect of imported opium, as compared,,
with native opium, will tell in favour of the latter. Native grown
opium is not, in the first place, subjected to the same regular
charges as Indian opium, and opportunities for smuggling and
evasion of taxation eu route are very much greater. At Canton,,
for instance, the total charges on native opium are not one-fourth
of those paid on Indian opium, while the selling price is at least
50 per cent. less.

Although, in theory, 110 differential dues can be levied on
(179)^ " u

Year. Quantity.
1S97 1893 1899 1900 1901 ...... Piculs. 49,279 49,484
The excessive import of 1899 is said to liave been due to a bad native crop, and adulteration of the native drug. The accompanying table shows the proportion of the various kinds of opium imported during the last two years:—
Year. ! 1 Mnlwa. | Patna. t Benares Persinn. Total.
j 1900 .. 1901 .. .. i I'iculs. i'iculs. 22,945 15,8(17 21,799 17,462 Piculs. Piculs. 9,976 491 9,789 j 435 Piculs. 49,279 49,434


â– 18

CHINA.

Indian opium, 011 arrival at the place of consumption, the new
taxes, everywhere being' instituted on prepared opium, which as a
rule contains a considerable percentage of foreign opium, may
also tend to curtail sales thereof. Of the total import H6 per cent,
goes to the southern provinces, 60 per cent, to Central China, and
4 per cent, to the north.

The northern ports, such as Tientsin and Newchuang, import
by sea practically no opium, native or foreign. Their supplies
reach them overland, from the provinces of Shenhsi and Honan in
the case of Tientsin, and from Manchuria in the case of Newchuang.
The demand of the rest of China, in so far as it cannot be met by
home production, is supplied by Ssuch'uan and Yunnan. No
reliable, or even approximate, statistics with regard to the total
production of or taxation on native opium are obtainable.*

Morphia. The import of morphia has nearly doubled within the last six

years, and from Amoy, where it was originally introduced—
probably to satisfy the cravings of returned emigrants—the use of
this drug has rapidly extended to Southern and Central China.
It is mostly consumed in the shape of opium pills, although the
practice of subcutaneous injection is by no means unknown, and
the saving of time and comparative secrecy connected with this
form of indulging in opium have doubtless proved great recom-
mendations in its favour. It is impossible to say what effect the
increasing consumption of morphia will have on the import of
opium from India,

Kerosene oil. Kerosene oil is an article the import of which is steadily
growing, and every few years sees a new producing country sending
its oil to compete with the older brands. For a long time
American oil enjoyed a monopoly, until in 1891 shipments of
Russian oil commenced, and in 1894 Sumatran oil appeared on
the scene. Last year Japanese and Borneo oil figured in the
customs' returns for the first time, and ere long Burma will, it is
to be presumed, extend its export to China. Shipments of oil in
bulk, by tank steamers, were started in 1897 by the Shell
â– Company, and the extension of this method of transportation to
almost all the treaty ports of China, coupled with the ereciion of
tanks on shore, wherein to store the oil lias, by facilitating distri-
bution, greatly increased consumption. The lowering of prices, in
consequence of keener competition, has also had its effect in
stimulating sales. American oil still heads the list in the matter
of quantity, and is able to command a price some 4d. or 5d. a case
higher than that of the other oils, but Eussian and Sumatran oil
are not far behind.

It is somewhat remarkable that the import of kerosene oil into
China should exceed that into India, and that in this article, alone
of all foreign products, the Chinese should be found better
â– customers than the natives of the latter country. In Indi^i
Russian oil has occupied and extended the field abandoned by
American oil, and the Director-General of Statistics is of opinion
that this transference means merely a question of relative prices.

* Tide pp. 4G and 47..


CHINA.

19-

It is far more likely to be the result of an arrangement
arrived at, between American and Bussian syndicates, as to spheres
of distribution.

The Hong-Kong refineries supply nearly the whole of the Sugar,
imported sugar, but daring the last few months beet sugar has
entered the field and determined efforts are being made to push
the sale thereof. The consumption of beet sugar in India, where
it first appeared in 1893, has made rapid strides, and it remains
to be seen how the Chinese will take to it. One is inclined to
think that it would not be adapted to Chinese use, and the fact
that it deteriorates, if kept in stock for any length of time;, is
certain to militate against it.

If one excludes nail, rod iron, spelter aud unmanufactured JletalB.
copper (the imports of which have fallen off considerably), ironware,
tin plates and steel (the imports of which have correspondingly
increased), there are no violent fluctuations in metals to record in
the course of the last decade.

The decrease in the import of nail rod iron may in part be due
to a rise of prices in Europe, but it is also prcbably to be
attributed to the fact that manufactured nails, imported from the
United'States and Germany, are coining into more general use.

Japan and Australia are the principal sources of supply for
unmanufactured copper, and a rise in home values during the last-
four years may have tended to reduce the import.

1 Spelter is chiefly used in the native arsenals, but the demand
is not brisk, and in any case, high sterling prices have proved
prohibitive.

Iron sheets and plates are gradually advancing, and this
advance is to lie explained by the large extension of recent years
in the out-turn of local docks and engineering works.

The development of the trade in kerosene oil, carried in bulk,
by tank steamers, has acted, as a stimulus to the import of tin
plates, which are converted into tins for holding the imported oil.

The steel chiefly imported is what is known as No. 2 German
iind Belgian, and British manufacturers, show no inclination to
-compete. It is used for making rough tools, and the trade
promises to be a large one.

The import of hardware is not a large one, as the Chinese
manufacture their requirements either from Belgian iron of
common quality or old scrap material.

The demand for galvanised sheets is increasing, and in view of
-the extension of mining and railway enterprise in the interior is
likely to continue to do so.

While the main staples of impoit, with the exception of Sundries,
kerosene oil and sugar, have to a great extent remained stationary,
.a reference to Table D will show the rapid strides made in certain
sundries, notably flour, matches ancl soap. The import of caudles,
cigars and cigarettes, aniline dyes, paints, perfumery and umbrellas
has also developed greatly.

These figures indicate a gradual change in native taste, and a
tendency to absorb, more and more, articles of Western luxury.
(179) v, 2


20

CHINA.

There is no reason why the trade in foreign candles and -soap-
should not go on increasing indefinitely, as their superiority over
native products of a similar nature becomes known throughout the
length and breadth of the Empire.

Table D.—Comparative Table of some of the Principal Articles
Imported for the Years 1891, 1899 and 1901.

Quantity.
Articles. -------- ------
1391 « 1899.+ 1901.1
Candles Value £ 47,930 47,520
ii £ 57,420 14,885'
Cigars and cigarettes .. jj £ 135,000 328.775-
Clocks and watches .. Pieces 142,951 206,221 163,736
Coal...... Tons 369,994 859,370 1,152,959
Dyes, aniline .. .. Value £ 266,800 264,250 239,890
flour...... >r £ 167,406 480,860 699,200
Glass, window Boxes 93,281 116,890 73,147'
Indigo Piculs 3,514 78,174 85,422
Leather.. ,» 16,200 20,688
Matches .. Gross , ( 4,894,011 11,315,147 13,157,659'
Morphia Ozs. 154,705 138,567
Mille 3,214,258 2,809,398 3,024,463
Oil, kerosene—
American ,. Gallons 39,348,477 40,724,989 57,759,66r
Russian 10,000,902 35.965,116 32,486,070
Sumatra .. n 11,993,302 40,640,049-
Borneo 223,790
Japanese .. ., 37,768 8,920-
Paints Value £ 118,875 107,302
Perfumery j> £ 9,900 17,074 18,632.
Soap £ 44,350 104,750 157,320-
Sugar of all kinds Piculs 290,035 2,077,959 2,564,787'
Timber...... 212,762 195,615 250,287
Umbrellas—
European Pieces 118,954 80,748-
Japanese .. >J •• 433,098 602,746 952,458

* Exchange, 4s. 9(Z. t Exchange, 3s. 0'ttJ. J Exchange, 2.«. lUrf.

Cigarettes. The supersession of the old Chinese water pipe and the Indian

hukka by cheap cigarettes affords another illustration of a revolu-
tion in Oriental habits. So far the practice of cigarette smoking
has only been acquired by a fraction of the population, but, as the
country opens up, the cigarette is sure to gain in popularity. A.
distinctive feature on the mountain paths of remote Yunnan, are
isolated mules in the large caravans, laden with tobacco tins—both
full and empty—brought back from Burma. The two brands,
which at present monopolise the markets of Central China, are the ,
Pinhead (American) and the Pirate (British). A factory for
turning out cigarettes, composed of a mixture of American and
Chinese leaf, has been in operation in Shanghai for some years,
and in the daily export returns of the customs there appear on the


CHINA.

21-

outward manifests of steamers, trading in that direction, small
consignments of cigarettes to India, principally to Burma.

' In the course of the last five years the imports of wines, beers Wines,
•and spirits has increased very considerably. This increase is, of
course, largely to be attributed to the growth of the European
population, but not a little is clue to the partiality of the native
palate to sweet champagne, liqueurs and beer. An innate, and
very justifiable, aversion to cold water, taken internally, has
hitherto closed the gate to derated waters of the class with which
the bazaars of India are flooded.

Chinese emigration is responsible for the very large quantities Flour,
of Hour imported. North China consumes principally wheat and
millet, but the staple food of the people south of the Yellow River
is rice. The emigrant, unable to procure rice abroad, has to adapt
â– himself to his surroundings, and on his return shows no inclination
to revert to his former diet. At the port of Swatow alone the
importation of flour has increased from 777,866 lbs. in 1892 to
14,913,733 lbs. in 1901.

Central China produces wheat of average quality, and mills for
â– grinding flour have recently been started. When two new ones,
at present in course of erection, are working, the total out-turn
will be 260,000 lbs. per diem. The colour of the flour is, however,
inferior to that of imported flour.

The quantity of rice imported depends entirely on the home Rice-
harvest, and for the last five years has averaged 167,000,000 lbs.
The bulk of it goes to feed the teeming population of the Canton
Jiiver delta, and is supplementary to an average annual import of
270,000,000 lbs. from the Yangtzu basin.

Considering China's own natural resources in respect of liquid Indigo,
indigo and coal, it is somewhat curious to find her an increasing-
importer of both articles. Of the total import of liquid indigo,
^Shanghai, in 1899, absorbed 90 per cent., whereas in the same year
Swatow exported abroad (not Hong-Kong) over one-thircl of the
quantity imported into the rest of China. Natural indigo in
'China, will, as in India, have in the near future to enter upon a
severe competition with synthetic indigo, and the result, as in the
case of the struggle between aniline and alizarine dyes, cannot
-remain in doubt.

As at last there seems a fair prospect of activity on the part of Coal,
the syndicates, started to develop China's coal fields, one may hope
that the large amount of money spent in purchasing foreign coal
will henceforth remain in the country. The increasing import of
â– coal is due to the growth of steamship enterprise on the Yangtzu,
. and to the fact that the vessels of certain of the Eastern squadrons
have, on the ground of economy, discarded Cardiff coal in favour
â–  of Japanese.

In the matter of matches and umbrellas Japan cannot be
touched, and as one sees isolated cases of Chinese ladies adopting
the use of parasols, one may expect that this article also will be
; supplied chiefly by Japan.


â– 22

CHINA.

Annex A. '-The question of tlie advantages and disadvantages of the

Indian and spinning industry in China, as compared with India, is one which
Chinese yarn. js incapable of being answered satisfactorily, as not only are
the data for complete comparison still wanting, but the China
industry cannot yet be regarded as in a fully developed state ;
much has still to be done in China in the training of the mill
hands, whose skill cannot of course be compared with that of the
generation of spinners which has grown up in India, and, more-
over, the China mills are still in the stage of the discovery of
what may be termed local economies in spinning, in which direc-
tion it may be remarked that much has been and is still being
accomplished.

Still, however, there arc some broad features in the spinning
industry of the two countries which render some measure of com-
parison possible, these may be conveniently classed under the two
headings of " advantages " and " disadvantages."

(1) Ativan- China's great advantage lies in her possession of a most exce liy quality cotton, superior in staple to most Indian cottons,
chin;'. " much whiter in colour, and much cleaner; as a consequence the

cotton spins with less waste, and produces a much brighter and
cleaner yarn than does the Indian cotton. This superiority is
shown in the better prices which the China yarn commands, its-
value being, count for count, some 4 to 5 taels per bale higher
than that of Indian spinnings, or say 6 to 7 per cent.

Cheaper coal is another factor in China's favour; the figures
that I have of certain Indian mills show their cost of coal per
spindle to be 0-84 taels per annum, against the Shanghai cost of
O'Gl taels, a difference in China's favour of say 27j per-cent.
As the coal bill in spinning forms some 20 per cent, of the total
charges, the advantage to China under this heading is some 5 to>
6 per cent.

Generally speaking, the climate of' Shanghai is better suited
to spinning than is the Indian climate. In many parts of India
it is necessary to use humidifiers in the mills to keep the air
moist; in Shanghai humidifiers are, so far as I am aware, un-
known, the natural moisture in the atmosphere being fully
sulficient.

(2) Disad- The chief disadvantage suffered by China as compared with India
cost difficult to say what is tlie extent of
Ciih n. this disadvantage, as the price of labour in India varies according

to locality ; the figures of the Indian mills in my possession
relate only to mills in Southern India, where labour is cheaper
than in Bombay, and work out at 1-77 taels per spindle per
annum ; in Bombay the figure is probably nearer 2'U0 taels. In
Shanghai the cost of labour is some 2-25 taels per spindle per
annum, a difference of 27 per cent, on the figure of the Southern
India mills, and 12£ per cent, dearer than Bombay; averaging
these two figures gives a. cost of labour against Shanghai of some
.20 per cent., and as the wages bill forms about 40 per cent, of the 1
total spinning charges, Shanghai's disadvantage in tlie matter of
labour would appear to be about 8 per cent. It- should be noted,


china.

however, that, with more experienced working, the number of
hands employed in the Shanghai mills is being gradually reduced,
and it seems reasonable to expect that only time is required to
bring our labour cost down to that of Bombay.

Another serious disadvantage l'rom which China suffers lies in
the conditions of the local cotton market, which is practically in
the hands of an unscrupulous set of cotton growers and dealers,
who are able to manipulate it almost at will, and who seem bent
on killing the industry which is the main support of their trade.
The only way in which the demands of the cotton hongs can be
kept in any degree of check is by importing Indian cotton against
them, and this the mills are compelled to do to a very large
extent, thus diverting the work of the mills from the purposes
for which they were started to the extent of such importation,
and, moreover, lowering the quality of the yarns produced. And
beyond this question of market is the great trouble caused by the
iniquitous practice of adulterating the cotton with water, a fraud
which, though easily detected, damages the cotton to an extent
which cannot be compensated for by any cut that may be made in
price; judging from the nature of the Chinese, it does not seem
that this trouble can be overcome until foreigners are able to have
their own packing station in the cotton districts.


2-t

CHINA.

III.—Exports of merchandiseThe total market value* of China's exports to foreign countries
during 1901 was 169,656,757 Haikuan taels (25,095,062/.), the
principal items being:—

Value.
Articles.
Currency. Sterling.
llaikimn tuels. £
Silk-
Raw silk, hand reeled . « 24,560,849 3,033,167
atcam filatures 21,807,230 3,225,444
Cocoms a id refuse .. 3,659,203 451,257
Piece-goJ-ls, pongees, &c... • • •• 10,83S,338 1,610,566
Total • • • • 60,915 620 8,920,434
Tea........ 13,512,826 2,733,355
Raw cotton 4,705,600
Bean cake .. 4,704,684
11 ides .. 4,522,701
4,036,698
Beans 3,866,035
Straw braid 1 3,590,784
; 3,457,160
Sugar .. 1 3,014,210 ,,
Oil (bean, groundnut, tea and wood) ! 2,796,639
Paper .. 2,666,644
: 2,150,14 L
Hk. taels.
Wool........ 1,603,130 ;
Camel's W1.0I .. 196,299 i i
- -- 1,SOS,429 ••
The silver values have not been converted, in order to show
the gradual progress of the export trade, as, expressed in sterling,
the real growth does not become so apparent.
The following figures illustrate the development which has
taken place in the value of exports since 1891 :—
Value.
Year.
Currcncy.f Sterling.!
Ilaikunn taels. £
1891 100,947,849 24,816,346
1892 102,583,525 22,333,238
1893 116,632,311 22,961,986
1894 128,104,522 20,483,379
1895 143,293,211 23,434,41L
] 890 131,081,421 21,846.903
1897 163,501,358 24,354,889
3898 159,037,141) 22,941,422
Ib99 29,469,696
1900 158,996,752 24,667,621
1901 1(39,656,757 25,095,062
* Vide note, Table A, )p. 4 and 5.
+ Expressed in silver. J Expressed in gold.


china.

25

These figures, combined with the quantitative statistics
furnished in Table E (1), afford some indication of how low
exchange has had the effect of stimulating exports from this
country, and of what one may expect in the future. It has been
asserted that had it not been for the fall in silver a great many
articles now appearing in the export list would never have found
their way abroad at all, and that a rise in exchange would cause
them to disappear altogether.

Table E (1).—Comparativk Table of some of the Principal
Articles Exported to Europe and the United States during
the Years 1891,1899 and 1901.

! Quantity.
Articles. -----

1891. 1899. 1£01.
Aniseed, star .. Piculs 5,851 10,926 11,018
Bristles...... it * 28,126 27,287
•Cassia lignea n • • 00,886 64,5)2 55,839
Pans...... Pieces 32,993,263 57,092,168 55,542,507
Feathers Piculs 40,392 71,110 46,844
Hair...... Value, tacls .. 319,998 409,432 236,961
Hemp Piculs 42,506 166,205 174,644
Hides, cow and buffalo >i • • 07,521 23?,700 3?,032,498 234,509
Mats...... Picces 16,439,546 33,334,410
flatting Rolls 238,050 514,086 495,384
Musk...... Catties 2,587 1,941 1,887
jNTut galls Piculs 38,933 36,177 35,383
â– Oil (bean, groundnut,
tea, wood, &c.) J) • ' 44,589 241,762 343,434
Oils, essential .. Jl • • 2,175 3,028 3,160
Rhubarb JJ * * 3,771 7,974 5,501
Scsnmum see.l Value, taels .. 172,500 297,365
Skins...... 881,225 3,791,049 4,026,693
Strawbraid Piculs 79,212 ; 9,526 94,075
Tul low, vegetable Jt • 23,490 111,312
Tobacco...... j y * ' 93,838 173,987 158,383
Tarnish., )> • • .. 6,5(i5 6,571
Wax, white .. .. )> • ♦ 5,737 4,174
Wool...... 5» • 135,363 242,152 134,471
., camel's .. M • * 39,878 14,224


!>0
C5

Table E (2).—Export of Silk during tlie Years 1892-1901.

Quantity.

Year. ; White, Haw. Yellow, Raw. Wild, Haw. Steam Filature. Cocoon?. Refuse, Cocoons. Befuse. Piece- Groods. Shantungj Pongees. ; Products, Various. Total.
ISf 2 Piculg. 75,722 Piculs. 9,032 Picu's. 16,433 Piculs. Piculs. 6,539 Pic ills. Piculs. 55,891. Piculs. 13,111 Piculs. | 2,751 | I'icuK 1,584 Piculs. 181,003
1893 68,052 12,345 13,759 • • 9,635 • • 57,01 j i 2,524 I,7c0 180,201
1894 68,926 9,931 16,241 4,344* 9,031 00,475 10,355:' 2,71 S j 3,949 198,581
1895 56,258 11,365 15,012 27,036 24,030 • • 50,744 20,501.' ' ■ ■'w 2,61.2 ■ 1,033 216,180
1896 38,223 0.775 ! 16,370 27,041 17,845 44,937 1.3,260 ii.2,590 5,545 167,586
1697 .. , 48,168 7,610 19,016 41,485 £0,145 9,180 58,350 18,433 1,903 5.432 230,123
ISPS 43,033 7,746 1G,4S!) 4.1,0:0 9.058 9,520 71,330 17,537 1$32 ; .1,837 219,950
1830 50,8 IJ li,148 24,071. 40,435 12,057 0,'J21 01,251 15,070 2,4 m 1,034 281,254
1900 31,70'j 11,267 IS,837 35,277 9,150 9,643 60,152 1 5.814 2,4 oil 1,782 190,201
1901 45,0:0 in,GC9 20,499 49,038 8,585 11,7^0 00,044 17,958 ..< i 2,301 238,591

e first j car in which n separate rrturn of steam (llaturc silk was made.


CHINA.

27

Table E (2).—Exfoet of Tea during

continued.

the Years 1892-1901-

* Values iik'.-n from Customs' returns, giving approximate average for the
whole Kinpi'.'C.

A comparison of the principal articles of jroJuco, raw and.
manufactured, exported from In !iu, with those exported from.

'Via mi Quantity.
1 ear. Black. Green. Dust. Brick. Tablet. Tola!.
Piculs. Piculs. Piculs. Piculs. Picu Is. Piculs.
1893 1,101,229 183,440 855 323.112 9,045 1,622,631
1893 1,190,206 236,237 1,273 382,361 10,754 1,820,8:81
1894 1,217,215 233,465 3,173 395,506 12,953 1,862,312
1895 1,123,952 244,202 320 481,392 15,814 1.865,68J
1896 912,417 210,999 £92 566,899 16,224 1,712,311
1897 76 i,915 201,163 1,628 558,293 6,149 1,532,153
189S 847,133 185.306 619 498,425 7,117 1.538,6)3
1899 935,578 213,793 1,288 474,026 6,105 1,630,79")
1900 863,374 200,425 575 316,923 3,027 1,334,324
1901 665,499 169,430 972 293.322 8,570 1,157,93 J
Table E (: V).—Comparative Table of Silver Prices X- of sundr-,"
staples of Export, showing Percentage of Ilise and Fall
during the last decade.
Price per Picul.
Arlirlus. Eise or ITnl!.
1891. 1901.
Ilaikuan tacls Haikuan taels. Per cent.
Aniseed, star.. J2-00 23 -00 + 93 -7
Beans .. 1-1.8 1-80 + 52-6
Bristles • • • 21-60 45-00 + 108 -3
Cassia.. 5-00 10 "60 + 112-0
Cotton, raw .. 10-80 16-00 + 43-0
h>mp.. 5 -40 7-60 + 41-0
Hides 9-67 19-28 + 100-0
Ma! (ill;; 3-CO 4-32 + 20 0
Nut tails- 9-32 21 75 + 133-0
Oils, bean, wood, lea, 5 -57 8 -11 + 46-0
lihubarb .. i 36-00 19 75 — 45-0
Sesainuin DCCCl 3 -19 4 -35 + 36-0
Silk-
White • • * 207 00 378 00 + 47-5
Yellow 200-05 230-03 + 40 0
Strawbraid .. 20 28 3317 + 88-0
Tea- "i
Black 20-75 17-10 — is-o
Given 17 -00 . 23 -22 + 37-0
Dust 4 "50 3 -6J — 333
Br'ek • • » .. i 7 00 8-70 ■h 24-3
Tablet .. : 2 1. \.0 16 -40 — 23-7
Tobacco, 11 -2L 15 00 + IB 0
Wool .. .. ; 8-21 12 00 + 46 0


â– 28

CHINA.

China, discloses a certain similarity in kind, hut a very wide
divergence in quantity and value. The Indian list is as follows :—
â– Hice, hides, jute, cotton, tea, opium, seeds, cotton yarn, indigo,
coffee, wool, lac, teak, silk, fodder, oils, coal, manures, provisions
and wheat. Their total value for 1900-01 was 69,470,886/, as
â–  compared with China's exports value, 27,801,660/.

The area of India is 1,700,000 square miles; population,
287,000,000. That of China proper, including the Manchurian
provinces, is 1,894,953 square miles; population, 367,000,000.

In general it may be said that the standard of wealth in China
is higher than in India, and one may add that, taking the people
as a whole, a more exalted plane of civilisation has been reached
in the former country. It would appear to follow that the Chinese,
being richer, their internal trade is larger, and that they are thus
in a position to consume more of their own produce, leaving a
smaller proportion available for export. The Indian system of
.administration moreover has, by fostering trade, removing internal
taxation and opening up means of irrigation and inter-communica-
tion, greatly increased the producing capacity of the area under
its control, and a considerable period of time must elapse before
one can hope to see the like influences achieving similar results
in China.

One very serious factor—in addition to those enumerated in
Section I—militating against "the extension of trade in sundry
exports in China is the suicidal policy of the native seller, who
imagines that it pays him to false-pack his goods* This, com-
bined with the keen competition, created by the increasing number
.of foreign buyers anxious to obtain a share in the limited export
.trade of the country, has led to serious deterioration in the quality
of the produce offered for export, with the natural result that the
demand from abroad is thereby restricted.

For the first evil the remedy is entirely in the hands of the
Chinese themselves. The Government or the trade guilds must
realise that a continuance of this practice will inevitably kill
â– what trade there is in certain staples of export, and it is incum-
bent on them to devise laws or regulations to meet the situation.
That this is by no means impossible is proved by the fact that,
â– when called upon to do so, the local authorities in Shanghai were
.able to cope successfully with the serious malpractices in connec-
tion with the supply of raw cotton to the local mills.
»! - A cure for the second evil would be the exercise of common
.sense on the part of the foreign merchant. America, Australia,
and more especially India, compete with China in the matter of
exports, but in comparison with these countries the export trade
of the Middle Kingdom has been not inaptly described as a.:< sample
.business." The Chinese middleman is, as a rule, crassly ignorant
of the conditions governing the world's markets, but when he sees
a'number of Europeans fiercely struggling to obtain a share of the

* Standard "chops" of raw silk conslilute an exception. The quality thereof
is, as a rule, very well maintained.


CHINA.

29-

JilUe lie has got to sell, one can hardly blame him if he tries to
make that little go as far as possible.

In 1892 there were some 84 European firms doing a sundry
export business. At present there are about double that number,
whilst the volume of exports, expressed in silver, has only increased
by 05 per cent.

Silk, up till then the second most valuable of China's exports,
in 1887 supplanted tea, which for years had occupied the premier
position, and the dwindling export of the latter article has enabled'
il; to maintain its place at the head of the list ever since.

It is difficult to arrive at an estimate of the annual produc-
tion of silk in China, but competent authorities are inclined to-
place it at 350,000 to 400,000 piculs. Two-thirds of the pro-
duction of Central China are said to be retained for home con-
sumption, and 50 per cent, of that of Southern China to go abroad.
The volume of the export trade does not show any material in-
crease, and the percentage it constitutes of the value of China's
total exports remains the same in 1901 as in 1892, namely 37 per
cent, of the whole. The natural laws of supply and demand
would lead one to suppose that a shortage in the European crop
of cocoons, and consequent enhanced prices, would result in a
considerable rise in the proportion of silk exported. But such is
not the case, and the explanation lies in the fact that the growers
at the commencement of a season only reel a certain amount of
silk for export, the remainder being reserved for native use. As
the latter silk is coarsely reeled, and not adapted to European
manufacturing processes, high prices abroad do not stimulate the
exports to the extent one would anticipate.

In China, as elsewhere, meteorological conditions have every-
thing to do with the out-turn of a year's crop, and bad weather
during the spring most seriously curtails supplies. This is a factor
not under human control, but in the matter of d'sease amongst
the worms the Chinese grower is apathetic in the extreme. Time â– 
and time again have attempts been made to induce him to adopt
the Pasteur system. Pamphlets in Chinese, pointing out the ad-
vantages thereof, have been distributed throughout the silk
districts, and enlightened officials have established schools of'
sericulture, demonstrating practically the difference between the
new and the old methods. It is therefore matter of great regret
that so little attention should be paid by the country people to
these well-meant efforts to improve the silk industry and benefit
themselves.

While the aggregate export of silk and its products has net
varied greatly, a considerable falling-off, as will be seen by refer-
ence to Table E (2), has to be recorded in the export of white â– 
native reeled silk, which in 1892 amounted to 75,722 piculs. Its
place has been taken by the output of the steam filatures, which
of recent years have been widely introduced in the Canton and
Shanghai districts. Trior to their establishment China was the
only country in the world producing high-class, hand-spun, coarse-
sized silk reeled from the live cocoon. This imparted to the thread


CHINA.

â– an elasticity of fibre which was not obtainable in silk reeled
from the dead cocoon, and the silk thus prepared occupied a
unique position in foreign markets in spite of its coarseness and
occasional imevenness. Fears have been expressed that, by
.adopting the steam filature process, China is virtually abandoning
her monopoly, and by entering into competition with the fine-sized
silks of the rest of the world, jeopardising her trade. Figures would
not, however, seem to justify such apprehension. The export of
steam filatures lias gone on steadily increasing, and in the course
â– of the last two years has exceeded that of white silk. The
tendency of the manufacturers of Europe is to demand a fine-sized,
evenly-reeled silk, and enquiries for hand-reeled silks aro conse-
â– quently not sustained.

A noteworthy feature in connection with silk production is
the progressive spirit displayed by the producer in the province
of Kuangtung (Canton). Steam filatures were there started on the
only paying basis, that is to say,-in the silk districts themselves,
and the result has been an increase in the output since 1S92 of
â– over 66 per cent. The preparation of silk and tea in China arc
essentially household industries, to which cacli member of the
family, adult or infant, male or female, contributes his or her
share.

The Cantonese, by introducing the new process at the place
â– of production, were able to retain the use of this class of labour,
and have every reason to congratulate themselves on the wisdom
•of their policy. When one sees with wliafc disastrous consequences
the adoption of the opposite principle in Central China of en-
â– deavourmg to concentrate steam filatures in a commercial centre
like Shanghai—not itself' a silk-producing district—has been
attended, their good judgment becomes the more apparent. From
â– a financial point of view the steam filatures in Shanghai have
proved comparative failures owing to the initial expense of erecting
large establishments, the higher cost of skilled labour, which in
the country is ready to hand, and to the reckless system of buying
•cocoons at the opening of the season. In their anxiety to procure
raw material they have raised the market, booked contracts for
forward delivery, and when supplies fell short, shown themselves
prepared to buy anything that offered. It need be matter for
little surprise, therefore, that at times they found themselves with
badly-yielding cocoons, purchased at ruinous prices, on their
hands, or that not a few experienced difficulty in meeting their
•engagements.

o o

Attempts to reel yellow and wild silks in steam filatures have
not proved very successful. Western China and Shantung are
the principal sources of supply of the former, and a filature was
started-in Hankow for reeling it, but only small quantities of the
output are. offered for sale to Europeans. Yellow silk is occasion-
ally sent down from Shantung, and, very occasionally, from the
Yangtzu to Canton, to be re-reeled. No attempts to re-reel in
-Shanghai have apparently been made.

Wild silk is produced from worms fed on the leaves of oaks


CHINA.

31-

â– grown oil the southern faces of the hillslopcs in the Manchurian
province of Eengt'ien. A certain proportion is spun locally, but
the major quantity of the wild cocoons are exported to Shantung,
where they are spun in so-called steam filatures, and produce a
much higher class silk. The former, known as ordinary tussah,
fetches 200 taels per picul, whereas the value of Ohefoo tussah
filatures is 260 to 310 taels per picul.

It will be noted that the export of silk piece-goods does not
.advance, and considering the fine quality of the Chinese stuff this
seems remarkable. Competition on the part of Japan, which
displays a greater readiness to meet European taste, and nn-
•evennass in weaving are said to be the principal causes of this
stagnation.

Of the total export of raw silk Europe absorbs 68 per cent., of
which about 10 per cent, goes to the United Kingdom, the United
States 23 per cent., and Indian and Eastern ports 9 per cent.
The average total export from Japan—principally steam filatures
—during the last three seasons has been 62,127 piculs, of which
•00 per cent, lias been shipped to the United States. In the
matter of taxation Japanese silk enjoys an advantage over Chinese
silk, in that it is free from all internal dues whatsoever—the
•only charge levied thereon being an export duty. "Were the
Chinese Government courageous enough to abandon their revenue
from inland charges on silk, they might find themselves rewarded
by the duties levied on an increased export trade. But as inland
•charges-amount to 200 per cent, more than the dues theoretically
leviable under treaty the adoption of so enlightened a policy is
unlikely.

The import of tea into the United Kingdom rose from
154,267,333 lbs. in 1871 to 286,000,000 lbs. in 1901. 90 per cent,
â– of the import of 1S71 came from China, whereas towards the
import of 1901 she only contributed 6 per cent. Taking the
world's consumption as a whole, the supply furnished by
â– China has fallen from 86 per cent, in 1871 to 29 per cent, in
1901.

Extension of production elsewhere, notably in India and Ceylon,
short-sighted fiscal policy of the Chinese authorities, and reluctance
on the part of native growers to abandon old methods and adopt
new ones in place thereof, are the main reasons for this very
remarkable decline.

While China could not hope to retain for ever her erstwhile
monopoly, there would appear to have been no necessity to play
into the hands of her rivals.

When the first note of warning was sounded in 18S7,
optimists considered that the position of China's teas in the
world's markets was unassailable, and that the superior flavour
thereof alone would suffice to safeguard them against the effects
â– of outside competition. Nothing was therefore done to reduce
taxation or to introduce improvements, with the result that the
worst fears of the so-called' pessimists have been more than
realised. India and Ceylon have driven Chinese teas out of the


CHINA.

London market, and are gradually but surely replacing them in-
Bussia and on the Continent of Europe. To effect a change in the
public taste necessarily takes time, but seeing how completely the
British public have abandoned the lighter and tine flavoured
Chinese teas, in favour of the more pungent leaf of India and
Ceylon, one is justified in assuming that the same thing will
happen elsewhere. Competent judges are of opinion that, in the
matter of Chinese tea, the highest point of llussian import has
been touched, and even to llussia the export from China was
7,750,000 lbs. less in 1901 than in 1899.

The export to the United States, where the demand is princi-
pally for green teas, may be said to remain stationary, yet there-
too, India and Ceylon are making every effort to gain a footing..
Hitherto, Japan has been China's only rival in the American
market, and the large increase in the export of tea from Formosa.
since that island was handed over by China, shows what an
enlightened policy can do to foster trade.

In 1.896 the export to Australia dropped suddenly by
50 per cent., at which point it remained until it fell last year
from 6,500,000 lbs. to a little over 1,500,000 lbs. While colonial
tariff legislation may have contributed towards this shrinkage,,
on the whole one can only regard it as an indication of the loss
of yet another market to China. The European exporter has
always complained bitterly of the heavy incidence of taxation,,
prior to export, and the pressure of competition only served to-
accentuate this grievance. It says little l'or the foresight of those
in authority, that his complaints and warnings should have been
so systematically neglected.

A committee of exporters, who drew up a report in L897 on
this subject, arrived at the conclusion that, making due allowance
for the deterioration of China teas and for the effect of the intro-
duction of new standards from other tea producing countries, the
principal cause of the lamentable condition of the China tea trade-
was the excessive burdens that it had to bear from export duty,,
likin and sundry unauthorised charges then exacted. According
to treaty the only charges leviable on tea for export are a com-
pound duty of H per cent, ad valorem, but statistics quoted
proved that in many instances an average of 34 per cent, was
levied on southern teas, whilst the commonest classes of green,
tea were taxed over 300 per cent. An article, so heavily handi-
capped, could under no circumstances compete with the produce
of countries only too anxious to do everything to foster their
exports.

Now, when the Chinese tea trade is past recovery, the-
export duties have been readjusted on a proper ad valorem basis..
But nothing has been done to lighten the burden of inland taxa-
tion, which is more than likely to be augmented, and thus that
which has been given with one hand will be taken away by the
other.

The further grievance that the Chinese will make no attempt
to improve the qualitirs of their teas, is one less easy to remedy


CHINA.

Experts are convinced that, under proper treatment, Chinese leaf
would yield good results and recover lost ground. The difficulty
is to induce the growers to adopt such methods of treatment. Some
six years ago an attempt, which ended in failure, was made to
introduce machinery in one of the Fukien districts. This dis-
couraging result was ascribed, not so much to any inherent defects
in the principle involved, as to a lack of favourable conditions for
carrying out the experiment. No efforts of this kind are likely
to be crowned with success, until Europeans are in a position to
procure their leaf at approximately producing prices, and that over
an area small enough to enable such leaf to undergo the initial

O O

stages of preparation within a short time of plucking.

It is only by securing the cordial support of the Government
that this object can be attained, but, from what one knows of
official methods in this country, there is small prospect of any
steps in the desired direction being taken.

Of China's total export of tea last year, 18,000,000 lbs. went to
the United Kingdom, 24,500,000 lbs. to the United States, and
51,744,533 lbs. to Russia, via the Black Sea and Siberia, while
Russian Manchuria absorbed 27,351,450 lbs, of which doubtless
a large proportion eventually found its way to Russia proper.

In the Consular reports on the trade of Hankow, Kiukiang,
Ningpo, Shanghai, Foochow and Canton, the ports whence tea is
shipped, will be found detailed particulars of the business done
there during last season.

A noteworthy feature of recent years has been the increasing
import of Ceylon tea dust, for purposes of mixing with Chinese
dust and fannings made into tablet and brick tea, destined
for the Russian market. The import last year amounted to
2,179,744 lbs. Some 273,280 lbs. of Ceylon leaf were also imported,
but the experiment of blending it with China leaf has not proved
very successful.

Turning now to the minor staples of export, one finds at the Raw cotton.,
head of the list raw cotton. Tliis article goes almost exclusively
to Japan to feed the cotton mills there, Japan producing but little
cotton of her own.

Bean cake, beans and bean oil, the products of Manchuria, are Bean
other articles, the foreign export of which is, so far, practically con- P1'odlK't5-
fined to Japan. There is and has been a large export of bean cake
from Newchuang to supply the needs of the sugar plantations in
Southern China, but the growth of the demand from Japan may
be said to have commenced at the close of the Chino-Japanese
war, and was the outcome of observations made by the Japanese
during their temporary occupation of the Liaotung peninsula.
Beans constitute an important article of food amongst the Japanese,
and bean cake is replacing fish manure, which of late has become
scarce owing to the dearth of herrings along the Japanese coast.

A certain proportion of bean cake is distributed by Hong-Kong
whence it is shipped to Java. Given greater facilities for transport
from the interior to the coast, cheapened production by introducing
steam in place of native methods for crushing the beans, and
(179) c


â– 34

CHINA.

reasonable ocean freights, there would seem to lie no reason why
it should not find additional outside markets.

His Majesty's Consul at Newchuang estimates that the total
production of beans in Manchuria is 600,000 tons per annum, and
those interested cannot do better than consult his valuable book
dealing with Manchuria, its trade and its products. (Manchuria,
by A. Iiosie, Methuen and Co., London, 1901.)

Hides. Next in order come hides, cow and buffalo, tlie export of which

has increased in volume 347 per cent, since 1891. Large as is
this increase, the export of hides does not begin to compare with
that of India, where conditions governing the supply, are almost
the same as in China. In both countries cattle are solely bred
for agricultural purposes, and it lis only when they get sick or die
of old age that their hides are available for commerce. Drought
and famine in India have the result of largely stimulating the
export, but, even under ordinary circumstances the normal export
is over 8,000,000 hides per annum, whereas, calculating eight hides
to a picul, China last year only exported some 2,000,000 hides.
This figure may go on gradually increasing, but it is questionable
if an approximation to the Indian export will ever be attained. The
areas whence present supplies are drawn are principally those in
â– easy communication with ports of shipment. Cost of transporta-
tion must prevent the large number of hides, which might be
collecte'd for export in Western China, from finding a profitable
market—Chungking, for instance, in 1899 only exporting some
"2,700 hides.

The bulk of tlie buffalo hides goes to Asia Minor, where there
is a special demand for the class of leather produced therefrom, in
connection with the manufacture of accoutrements for the Turkish
army.

Skins. The export of skins is also a large and growing one, having in-

creased by 457 per cent, in value in the last decade. The principal
area of supply is of course Manchuria and North China, a certain
proportion of sheep-skins passing into consumption via Hankow.
The mountains and forests of the provinces of Kirin and Hei Lung-
Chiang, and their inaccessibility render them ideal habitats for the
ferae naturae, whose skins supply Europe with the more expensive
furs. Moreover, in Manchuria is to be found the, for China, some-
what exceptional phenomenon of an intelligent effort to increase
production, by breeding animals for the sake of their commercial
value. Thousands of small dog and goat farms are scattered over
Manchuria and Mongolia, the produce of which, in the shape of
.skins, contributes very materially towards swelling the export
figures.

Sirawbrnid. Strawbraid is an article the export of which has been steadily
declining, owing to the lack of attention paid by the native pro-
ducer to the warnings of the foreign purchaser, that unless greater
care were exercised in plaiting and packing, the trade would lie
diverted elsewhere.

The export, which in 1887 amounted to 151,000 piculs, had in
1901 diminished to 94,000 piculs, and 1901 shows the largest


CHINA.

35-

•export-since 1897. Tliis falling-off was entirely due to the dis-
honesty of native manufacturers, who, by various methods of
deception, such as "short-sticks" and "stretching," cheated the
foreign buyer. In consequence plaiting was started in Japan,
where, as the result of intelligent technical instruction and of
taking pains, an article is turned out, which is more regular in
make and quality than Chinese braid, and which naturally is pre-
ferred abroad. Japan's export has more than doubled since 1894,
but were the Chinese to revert to the paths of honesty the demand
would not be slow in reviving.

The export of mats and matting appears to be growing steadily,
although in 1901 there was a falling-off; as compared with one or
two previous years.

The export of sugar is confined to the southern ports of Canton,
Swatow, and the Island of Hainan, whence it is exported to Hong-
Kong and from there reshipped to China, where, in its assumed
capacity of a foreign import, it can claim transit pass privileges.

Tobacco and rhubarb are both promising staples of export
which have suffered through lack of care in preparation. And the
same may be said of feathers and bristles, the supply of which is
abundant.

Sesamun seed made a large advance last year, but it lias to be Sesauium
borne in mind that the export of this article from India is affected se
by the same climatic influences as the export of wheat, and a bad
3Tear for the latter means an equally bad year for the former.
'Shortage in the Indian supplies may therefore account for the
increase of China's export:—

The following is the reply sent to a communication from the Wool.
United .Kingdom, asking for certain particulars with regard to the
export of wool from China,

" The statement that the export of wool from China has had
an extraordinary development of late years can hardly be said to
be accurate. Whereas the assertion that the bulk of the wool
exported goes to the United States is substantially correct.

" The following are the figures for the last 10 years :—

<179)


â– 36 CHINA.

" Exfokt of Sheep's Wool from China during the Years 1892-1901.

Quantity.
Year.
Total To United
Exports. States.
Piculs. Picuis.
1892 127,603 119,219
1893 . * >. ■ • ■. 91,410 78,534
1894 .. . • *. • • 211,996 191,886
1895 197,439 179,470
1896 ■ ■ ■. »• • • 145,119 128,551
1897 204,197 187,24?
1893 •. 110,423 101,03?
1899 ,, ,, ,, ,, 195,491 183,191
1900* .. ■. . • • • 96,674 77,931
1901 124,780 113,913
Total 1,505,140 1,361,027
Per cent.
Avernge export ,. .. .. 90

* Of the balance (2,500,000 lbs.), 967,150 lbs. went to the United Kingdom."

The writer goes on to say: " that the Americans have an.
advantage over us in the matter of freight, equivalent to "3s." 8rf..
per lb. The quantity of wool pressed into 40 cubic feet, for ship-
; ment, varies somewhat, but if 2,000 lbs. of sheep's wool be takein
as an approximation it will be found not to be far wrong.

" Rates of freight to New York via Suez have ranged during:
the past 18 months between 1/. 5s. and 11. 10s. per ton of 40 cubic-
feet, while the ' conference' rate to London has been constant at
21. 5s. Therefore the extreme difference, in favour of New York is
11. per 2,000 lbs., or not quite ^d, per lb.

" On the other hand, wool imported into the United States,,
has to pay a duty of 4 gold c. (1'97«!.) per lb., so that, as a matter of
fact, the British importer can lay his wool down l-82d. per lb.
cheaper than his American competitor.

" The vexed question of the differential rates charged by the
British shipping conference, to the detriment of British trade
interests, has been more or less prominently before the public,
ever since the conference was formed. But surely no one has
attributed this action on the part of shipowners to subsidies or
other assistance, granted to them by the United States Govern-
ment.

" Mr.....is of opinion that there will be a far larger export

of wool from China than there is from India.

" The latter country, according to the Board of Trade returns,
exported to the United Kingdom alone 30,730,361 lbs. in 1900.
The average annual export from China during the last 10 years
was 20,068,533 lbs., and experts differ as to whether or not these
figures can be improved upon. One exporter, who points out that


CHINA.

in 1898 there were in China no less than 44 firms dealing in wool,
struggling with each other for a share of 1 per cent, of the whole
world's production of that commodity, contends that the limit of
supply has been reached, as, were there more wool to be had, it
â– would have been brought down to the ports long ere now.

" Another exporter, who has been shipping to the United States
for some years past, holds the view that a reduction of the import
duty to 2 gold c. per lb. would stimulate the export from China,
He is, however, unable to cite any facts in support of this theory.
•Chinese wool is almost exclusively used in carpet manufacturing,
â– and it is only when the price of Scotch wools becomes prohibitive
that there is a demand for it. The anxiety displayed by the
foreign buyer to fill his orders has led the native seller to mix
with the wool large quantities of sand, on which freight and duty
have to be paid, as, were the wool cleaned prior to shipment from
here, there would be very little left to ship."

In addition to the staples of export, in which European
commerce is concerned, there appear in the customs' returns large
quantities of native articles, shipped to the countries to which the
stream of Chinese emigration flows, and provisions, vegetables and
live-stock, for consumption in the European colonies, which fringe
ihe coast of China,

IV.—Inland Trade.

With the exception of the trans-frontier trade with Russia and (a) Disiribu-
a negligible quantity of commodities, interchanged across the of foreign
western frontier of Burma, China's supplies of foreign merchandise 1D1P01'ts-
•are drawn, in the first instance, from three great maritime centres,
Rangoon, Hong-Kong and Shanghai.

It is difficult to say what the volume of the trade passing
through Bhamo and Myitkina is, as only approximate statistics
-are to be obtained. The aggregate estimated value for 1900-01
was 275,000/. When, however, the custom-house at T'eng-yiieh,
opened in the course of last year, shall be in a position to furnish
returns for a complete twelvemonth, fuller data, as regards the
trade with South-Western China, will be available.


china.

Table F (1).—Table showing Percentage of Foreign Imports
distributed by Hong-Kong and Shanghai (based on figures-
for 1899).

Of the total imports into China, only 184 per cent, avail'
themselves of transit pass privileges.

The ordinary treaty port is visited only very occasionally by
the large ocean liners, and the accompanying Table F (1) gives the-
proportion in which the two principal points of trans-shipment
distribute import cargoes along the coast.

As regards the despatch of goods into the interior from the
port of entry, this can be effected in one of two ways. The owner
can either send them inland, subject to any transit charges,,
leviable in the districts through which they pass, or he may, in
terms of the Tientsin treaty, secure complete immunity from sucli
taxation by paying the equivalent of an half import duty.

Percentage.
Hong-Kong (o — Yunnan .. .. .. Hainan .. .. . Pakhoi.......... West River Canton River delta Arnoy Swatow 1-0 o-o 0'9 4.-1 13 G 3 -6 49
Total...... 29-0
Shanghai to — Gulf of Pecliili ports .. Yangtzu ports Shanghai and Soochow .. Chekiang and Fukicn 2G-3 23-7 14-1 G-9
Total...... 71 -0
Table F (2).—Percentage of Imports, exclusive of Opium, pro- ceeding from the Treaty Ports into the Interior nuclei Transit Pass (based on figures for 1899).
To— Percentage.
Yangtzu ,, above Hankow ,. .. .. „ „ below and including Hankow Chekiang and Fnkien Canton River delta ,. Paklioi.............. lluiiinn.. .. .. .. .. ,, 0 -27 7 -00 52-60 4-15 20-00 31 -50 11 30 5 00 35-10 18-00 3-39 85 -00


CHINA.

39

It has been clearly laid down that the treatment of both
classes of goods, 011 arrival at their destination, shall be absolutely
non-differential, terminal dues—if any—shall be the same for
each.

Table E (2) shows that, taking the Empire as a whole, half
duty exemption certificates are only applied for in two cases out
of ten, and one concludes that it must be more to the trader's
advantage.—pecuniary or otherwise—not to use transit passes,
even through the alternative course renders his goods liable to
such arbitrary exactions, as petty officials in charge of likin or
other barriers may see fit to inflict.

Likin, now so notorious that the word appears in the latest
standard English dictionaries, is a levy on goods in transit,
originally calculated at the rate of one per mille, and instituted in
the early fifties, for the purpose of defraying the cost of the
T'ai p'.ing rebellion. It is thus contemporaneous with and similar
to the British Income Tax. As regards both, did the Governments
concerned explain that the post was merely a temporary expedient,
and give assurances that it would be withdrawn, as soon as
circumstances permitted.

Hitherto, in neither country have statesmen seen their way to'
carry out this undertakins:. but while in the United Kingdom
there is small prospect, prior to the Greek Kalends, of abandoning
a tax on incomes, there is in China a growing feeling that, could
other means of raising an equivalent revenue be devised, likin
should be done away with. The total amount it brings in to the
Government coffers—Imperial and provincial—is said to be'
between 16,000,000 to 18,000,000 taels. The mode of collection,
however, is so radically vicious, and affords so many opportunities
for harassing trade that the majority of enlightened officials are
anxious to see it abolished.

Water-borne goods being more easily checked and controlled
than those travelling by land, the main strongholds of the likin
colleetorate are to be found along the great waterways of Central
and Southern China,

In the north and south-west, where merchandise is conveyed
by carts or pack mules, over mountain roads and for the most
part through thinly populated tracts of country, likin is practi-
cally unknown. One would therefore infer that in Central and
Southern China, at least, the fullest advantage would be taken
of the comparative immunity conferred by transit pass, but only
5.per cent, of the imports into Shanghai and the Canton River
delta, the centres of two very remarkable systems of water com-
munication, avail themselves of this privilege.

The explanation of this state of things is as follows:—

The areas of distribution are rich, the distance the goods have
to travel is not great, while the volume of the trade is very large,
and hence there is not the same urgent necessity, as in the case of
poorer provinces, to resort to extraordinary pressure for the
purpose of raising provincial revenue. The likin stations are
therefore in a position to charge rates lower than the half duty of
the transit pass.


â– 40

CHINA.

It is widely assumed by Europeans that likin is levied 011 a
fixed seale in accordance with a published tariff. At the time
when likin stations were first established, a scale of charges may
have been drawn up, but little lias ever been heard of it since.
Each boatman cr merchant, individually or through his guild,
makes a private bargain with the collectors—011 a mutually
profitable basis. He may pay either in money or in kind, and as
long as he is open to compromise no undue friction arises. On
arrival at his destination nothing unreasonable in the way of
terminal taxation is demanded from him, as he lias played the
game, according to established rules, and is therefore entitled to
consideration. The pestilent person, who takes out a transit
pass, however, is treated very differently. He in the first place
pays his duty at the port of entry, whence it is all remitted to
Peking and thus lost to the province. He is tenacious ol'
imaginary rights, and on arrival at his destination makes incon-
venient enquiries as to the non-differential nature of terminal
taxes. If lie be 11011-Chinese, the likin collectors resign them-
selves to the inevitable, pass him through, and are glad if they hear
nothing more of him. If on the other hand a Chinese has the
temerity to claim rights under treaty, he is accorded very different
treatment. His boats are subject to undue delays, and he is
generally harassed to such an extent that he finds it desirable to
abandon the use of the transit pass altogether, or if he be travelling
in a region where transit passes are more or less respected, to
conciliate the collectors by paying unauthorised charges when
asked to do so. Theoretically, of course, he can claim refund and
damages, and the Consul would be only too ready to secure redress
on his behalf. That official, however, cannot well take action
unless some one makes a specific charge and supports it with
adequate proof. This the native invariably declines to furnish, as
by so doing he would set machinery in motion, which might
eventually ruin him. He not unnaturally prefers to pay his likin,
or any excess charge over and above his half duty, that may be
â– called for, and pursue his avocations in peace.

I11 the country lying between and surrounding the ports of
Hankow and Cltinkiang, it is true, transit passes are taken out
freely, but in most cases the goods covered by them have long
distances to travel, and the transit pass only safeguards them up
±0 a certain point. Higher up the Yangtzu the authorities decline
to recognise the validity of these documents.

Some years ago the authorities of Kuanglisi took upon them-
selves to interfere with goods under transit pass, in the hands of a
European, and after a long fight heavy damages were recovered from
them. This is sufficient to account for the high percentage of
passes taken out along the West River.

That in Yunnan almost all imports take out transit passes
would seem to contradict the previous statement that likin barriers
do not exist apart from waterways.

The real reason for the extensive use of half-duty certificates
in that province is that Mengtzu was opened after public attention


CHINA.

41-

Siad been drawn to the evils of likin taxation elsewhere, and the
particular attention of importers was drawn to the advantages,
which this, to them unknown, system would confer. They
accordingly commenced by taking out transit passes, and have
â– continued to do so ever since. It is open to question whether it
would not be cheaper for their goods to pay as they went along,
â– and it is probable that the use of transit passes is encouraged by
the authorities, as the Central Government thus obtains more
revenue from that province, than under other conditions it could
â– expect to receive.

The great objection to the likin system lies, not so much in Lit in system,
the heavy incidence of present taxation as in the fact that there-
under transit and terminal charges on foreign goods can be
indefinitely increased, and the free and speedy circulation thereof
unwarrantably hindered. To abolish it entirely in respect of native
â– ;is well as foreign goods, and to come to some arrangement, whereby
the resulting loss of revenue can be made good to the Chinese

o O

Government, is the only adequate remedy for these evils, and of
late an attempt to deal with it on these lines has been made. It
is, however, regrettable to find that, notwithstanding long-con-
tinued and oft-reiterated protests against likin, as an intolerable
burden on trade, certain sections of the mercantile community
are inclined to advocate the maintenance of the status quo, with
all its inherent drawbacks and defects, rather than to accord
their support to a comprehensive scheme for grappling with an
undoubtedly difficult problem. The attitude assumed savours of
illogicality.

A collective levy of per cent, ad valorem on imports,
â– coupled with other ill-defined and varying charges as well as
unknown potentialities of delay, is either one which the trade
can stand or not. If the former, why the loud previous outcry ?
If the latter, why the persistent opposition to salutary reform
measures ?

Instead of going straight to the root of the matter, a com-
promise would appear to be desired, and it lias been proposed to
•commute all terminal taxation by an additional compulsory pay-
ment of 2i per cent, on all goods going beyond the treaty port
area. If the present working of the transit pass system has been
explained at all clearly, it must be obvious that the carrying out
â– of such a proposal, means simply the gratuitous gift to the Chinese
.authorities—whether Imperial or provincial—of whatever sum
such a surtax would realise. That it would be possible to ensure
its collection on all merchandise uf the kind indicated is very
improbable, and, wore China to grant concessions in consideration
•of such raising of the duty, the bargain would not be greatly in
her favour. What guarantee, on the other hand, would the
European merchant have that his goods, having paid the surtax,
would reach their furthest destination free of additional charges ?
As in the case of transit passes at present, the native trader will
find it to his interest to conciliate those in authority, by paying
what was asked from him. He would continue to refrain from


â– 42

CHINA.

coming forward to make open complaint, and those concerned,
unable to prove that an infraction of treaty had taken place,
would have to acknowledge in the end that their well meant
efforts had resulted in nothing but an increase of initial taxation.

The unwillingness of the mercantile community to support-
schemes, aiming at complete likin abolition, is largely due to an
apprehension that any undertakings entered into would be vitiated
by lack of bona fides 011 the part of the Chinese Government,,
and that, in spite of all guarantees, inland taxation would go 011
as before. They are therefore averse to committing themselves
to a policy which may in their opinion lead to trade being more
heavily burdened than at present.

To this the answer is that once all likin barriers and tax
stations have been done away with, it will be no easy matter to-
re-establish them, and freedom of circulation, having been publicly
announced, the Chinese trader, feeling himself assured of support,
will not be deterred, as at present, from coming forward to
make complaint should he find any of his privileges abrogated.
Differential taxation having ceased to exist, he could not be arbi-
trarily called upon to pay unauthorised charges, and check and
control 011 the part of foreign officials would be greatly facilitated.
Even in the event of things not working smoothly in the begin-
ning, it can be taken for granted that pressure will not be relaxed
until complete satisfaction is obtained.

. That a large number of officials—great and small—connected
with the likin collectorate would be thrown out of employment
and create trouble has always seemed to Europeans a formidable
obstacle in the way of reform. When one knows that China's
statesmen, who, it is to be presumed, have a fuller grasp of the
situation, attach no importance whatsoever to this argument, one
may be content to accept their view.
(J) Collection case 0f foreign imports, inland dues, while en route

produce for export, can in the case of native produce for

shipment shipment abroad, be commuted by a payment of half the tariff"
abroad. export duty. And under certain conditions native produce, not
necessarily destined for shipment to a foreign country, may claim
similar treatment.

. The customs returns of transit trade, making no distinction
between the two classes of goods, it is not possible to compile a.
table, showing the proportion of produce for export brought down
to each port under transit pass, but as only 7 per cent, of the
total exports in 1901 availed themselves of this privilege, the
absence of such a table is matter of no great moment.

The incidence of internal taxation on native produce is by
110 means light, and those who object to an increase of duty on
imports, in return for an abolition of likin barriers, leave out of
account the effect such a measure would have in stimulating-
exports.

The elementary economic axiom that imports can only be paid
for in exports seems to have been entirely overlooked, and as it
has been demonstrated that internal taxation killed the tea trade,


CHINA.

43-

is threatening silk, and seriously affecting other staples of export,,
this short-sighted policy is much to lie regretted.

At present produce for export is collected in the interior by
native agents of the exporting firms 011 the coast, but this system
not having been found entirely satisfactory, certain foreign mer-
chants wish to secure the right of unrestricted inland residence,.
for purposes of trade.

Inland residence, 011 the part of missionaries, is already so
strongly resented by the Chinese officials, that it is open to
question if the resulting advantages would compensate for an
extension of this hostile attitude to the mercantile community.

By judiciously setting to work ofi the lines of Article AT,
Section .':>, of the Shimonoseki treaty, the foreign merchant,
anxious to develop his export trade, ought to have 110 difficulty
in so doing, and this with depots at inland steam navigation stages
ought to suffice for all his leqnirements. The extension of rail-
ways and mining enterprise will also gradually bring about
changes, which it would be very unwise lo try and iorce on
prematurely.

As the Imperial Maritime Customs has hitherto had under ('â– ) Inti-ma]
its supervision only such portion of the internal trade as is carried natlvc
011 between the treaty ports of China in vessels of foreign type,
the statistics published cannot, even approximately, furnish an
idea of the value of the internal trade of the country. When
effect shall have been given to the stipulation of the final protocol
of 1901, that goods carried in native vessels shall, at the treaty
ports, pass under the control of the Maritime Customs, one may
be in a position to gauge more, accurately the volume of trade,
moving coastwise and along the main inland waterways. But
some time must elapse before a complete transfer can take place,,
and in the meantime the inadequacy of their staff and latent
opposition, on the part of those interested, renders Lhe task of the
Commissioners a difficult one.

As far as steamer-borne goods are concerned, the total native
imports at the open ports (native imports into one port being-
exports from another) during 190.1 amounted to 125,454,462 taels.
(18,556.806/.).

The figures for 1899 were 1:12,969,J43 taels, a faliing-olT in
1901 of 7,514,6S1 taels, or roughly 1,000,000/.

An interesting feature ir. connection with this internal trade-
is the widespread practice of shipping produce from the southern
ports of China to the British colony of Hong-Kong, whence they
are exported and re-imported into China as goods of foreign origin,
being entered as such in the customs' returns.

This is done in order that, on return to China, they may, as
quasi foreign goods, secure the privileges of a transit pass. That
a merchant finds it to his advantage to pay a 5 p°r cent, export
duty, freight to Hong-Kong and back, an import duty of 5 per
cent., and a transit duty of 21 per cent, on his produce, for dis-
tribution, in many instances, in the very province in which it was
grown, is a striking illustration of the heavy incidence of internal


44

china.

taxation. Two of the principal articles thus exported are tobacco
•and paper.

Another anomaly of taxation is that goods, of native origin
â– carried coastwise, are subject to what is known as a coast trade
â– duty, which consists of an export duty of 5 per cent, at port
•of shipment and an import duty of per cent, at port of
entry, and are thus more heavily taxed than those imported from
abroad. Chinese sugar and coal, for instance, moving from one
port to another along the coast, have to pay duty at the rate of

per cent, ad valorem, whereas the same commodities, coming
from Hong-Kong or Japan, pj^y at the rate of 5 per cent. only.

The principal articles circulating between the ports, are food-
stuffs, native cloth, silk piece-goods, oils, seeds, sugar, chinaware,
bean cake, liquid indigo, groundnuts, mats and matting, rush hats,
gunny bags, and the hundred and one items which figure in the
_Chinese pharmacopoeia.

With the exception of an exchange of the bean cake, ground-
nuts and rice of Northern and Central China for the sugar cf the
South, as a rule effected directly, the major portion of the inter-
port trade centres in Shanghai and Hong-Kong, the point of
contact of the circumferences of their spheres of distribution being
Foochow.

Table (r, based on the returns for 1899, those for the two
later years, as has been pointed out, not affording complete data,
illustrates the share taken by each treaty port in the external and
internal trade of the country.


CHINA.

45-

Table G.—Value in Sterling* of the whole Trade of each Treaty
Port, under the cognisance of the Imperial Maritime Customs,
(based on the Returns of 1899 and exclusive of Treasure;.

* Exchange : 3s. = 1 Iluikuan tacl.

It will be noted that the total value of produce of local origin
exported from the Canton I'iver delta to foreign countries is given
as over 8,000.000/. That of course means that the bulk thereof'
went to Hong-Kong, and w-as there transhipped coastwise, or to-
Europe and America. The same remarks apply to exports from
Swatow, Kiungchow, Pakhoi and Wuchow.

The largo direct shipments abroad from Newchuang are prin-
cipally bean cake to Japan.

Direct exports abroad from Hankow and Foochow mean tea,
three-fourths of the export from the former port going to Odessa
by sea in steamers specially chartered for the purpose. Amoy's-
foreign exports go to Java and the Straits Settlements to supply
the wants of Chinese emigrants living there. Chefoo's exports-
go to llussian Manchuria, Japnn and Hong-Kong, 40 per cent, of
the exports to the latter colony in the shape of vermicelli. Hong-

Net Imports. Net Exports (Loe.il Origin).
Port. From Chinese Ports. ;
From Abroad To Foreign Countries. To Chinese Ports. i
Shanghai ,. ,. Tientsin...... Canton River delta Cunton...... Kowloon .. I">PPi...... Hankow Newebuang Swatow...... Chefoo...... Chungking Chinkiang Wuliu...... Kiukiang Foochow Ningpo...... Hangcliou" VVuchow Meugtzu Kiungehow ., Pakhoi...... Icliang .. • • Saimlini "West River stages Nanking Wencliow ,. .. Soocliow £ 5,823,600 5,892,000 6,307,050 2,083,500 3,695,300 548,250 3,250,000 3,266,500 2,055,000 ] ,845,600 2,461,400 2,198,400 1,041.900 1,188,750 1.020,250 1,381,275 410,500 614,700 506,100 365,000 366,600 238,500 348,450 215,250 92,925 127,5C0 54.0C0 £ 2,213,740 3,393,600 4,131,794 2,672,ICO 871,54 1 538,150 1,210,800 899,600 2,593,9C0 838,125 582,750 1,057,600 409,200 287,750 308,701 690,000 411,150 354,500 13,800 2,415 5,325 222,500 11,5.°0 1,65.1 57,450 42,750 ' 59,250 .£ 6,830,000 132,585 8,366 2-:0 3,505,750 3.934,000 928,500 090,900 1,303,800 616,950 299,500 UV.OO 1,710 877,000 183,500 276,900 282,600 321,500 348,500 71,100 13,950 £ 3,S25,C00' 2,222,700' 535,160 535,160 4,928,700 1,7^8,750 1,507,000' 1,245,000 1,325,000 1,079,400' 1,689,500 1,358,200- 397,200 180,300 647,250- 9G0.500 13,230 8,550 12,000- 95,100 14,730- 4,500- 209,250 73,650 104,500


40

CHINA.

Kong is also the destination of the Chinkiang direct exports,
â– almost exclusively groundnuts, lotus seeds and groundnut oil.

With the exception of a small amount of opium, sent into Tong-
king, the entire export of Yunnan consists of tin in slabs—the
â– output of the Kuo-chiu mines, situated three days away from
Mengtzu—and is shipped to Hong-Kong.

The residue of the exports of the Northern and Central China
ports is conveyed by local steamers to Shanghai.

The total value of such shipments in 1899 was 12,250,000/., of
which 6,750,000/.—almost exactly the equivalent value of the
native produce .of local (i.e., Shanghai) origin* exported—was
sent abroad, 2,750,000/. being reserved for local use, and the
remainder reshipped to other Chinese ports.

Hong-Kong being a free port, it is impossible to obtain
similar statistics as to the ultimate destination of the products of
Southern China, which it distributes.

The value of the total exports of 1899 was about 29,000,000/.
'Shanghai, as stated above, sent abroad nearly 13,500,000/., the
other ports exported direct some 5,000,000/. worth of produce, so
that Hong-Kong must be held accountable for the balance.

A rough calculation would seem to show that the balance of
imports and exports in the south is fairly evenly maintained, and
that the disparity between the total import and export figures is
• due to Northern and Central China absorbing foreign goods of a
value greater than that of the native produce, which they dispose
of in foreign markets. ^

It is also difficult, except in a very general way, to indicate
the course of interport trade in native produce. The exchange of
the bean products, groundnuts, groundnut and other oils of the
north for the sugar of the south has already been alluded to.
Rice is exported in large quantities from Wuhu and Chinkiang to
supplement short supplies in the Kuangfung province. Eoocliow
(a large lumber-exporting centre) and Kiukiang furnish the rest
of the Empire with paper; Kiukiang, and to a lesser extent,
Canton, with chinaware. Medicines and yellow silk are the
principal exports of Ssuch'uan ; bean products, straw hats, hemp,
wood oil, native umbrellas and lumber those of Hankow. Tobacco,
in so far as it is not locally grown, is imported from the Manchurian
provinces, and the country of which Hankow is the exporting
centre. In the "same way deficiencies in the local supply of opium
are supplemented by imports from Ssuch'uan and Yunnan, via
Ch'ungking, and overland through Hunan and Kianghsi. The
Kiangnan (Lower Yangtzu) market is said to be entirely supplied
with Hsiichoirf" opium, inferior in quality to Yunnan opium, but
superior to that of Ssuch'uan.

It is only with regard to such quantities as come under the
cognisance of the Maritime Customs at Ch'ungking that figures
are available. After having once paid the Maritime Customs duty,
which, in the case of Ssuch'uan opium, amounts to about 33 per

* 5,500,000J. representing silk and its products.

f North-West Kiangsu.


CHINA.

47-

â– cent, ad valorem, and in the case of Yunnan opium 20 per cent.
(Indian opium paying on an average 18 per cent.), the drug is
freed from all further taxation, and it is therefore to be presumed
that only such opium as is intended for distant markets, and wishes
to escape cumulative charges en route, elects, on leaving the west,
to report at the Maritime Customs rather than at the less ex-
pensive native .stations.

The Maritime Customs' figures, showing the export from
-('h'ungking, for the last 10 years are as follows:—

The quantity passed through the native custom-house during
1001 was estimated to be 15,000 piculs, which may be said to
represent the consumption between Ich'ang and the Lower Yangtzu,
the 16,000 piculs of the foreign custom-house going to maritime
ports beyond Shanghai.

The total number of vessels entered and cleared in 1901 was
â– 64,844, aggregating 48,416,668 tons. This includes 7,921 Chinese
junks (345,170 tons), but not the native shipping of Kowloon or
Lappa, nor that taken cognisance of by the custom-houses of
Mengtzu (for Manhao on the lied River), Chungking, Soochow,
and Hongchow. Leaving out the junks, there remain 56,923
vessels, 48,071,498 tons, as against 34,443 vessels, 33,228,773 tons,
â– entered and cleared in 1896, an increase in tonnage of 44 per cent.
The number of sailing vessels has increased by 2,500, their tonnage
by some 30,000 tons, but it is not possible to discover how much
â– of this increase is due to an expansion of the junk traffic.

Of the gross tonnage, inwards and outwards, the percentage
contributed by the British Hag in 1896 was 65 per cent.; German,
6 per cent.; Swedish and Norwegian, 3 per cent.; French, 1 per
•cent.; Japanese, 2 per cent.; Chinese, 22 per cent.; and all other
flags, 1 per cent. In 1901 the percentages were somewhat
.differently distributed, the United Kingdom and China's per-
centage fell to 54 and 13 per cent, respectively, whereas the per-
centage of Germany rose to 16 per cent., that of Japan to 11 per
.cent., and that of France to 2 per cent. The Swedish and Nor-

V.—Shipping.

Year. Quantity.
Kculs.
1P02 2,580
1S93 . , , , 2,598
1S91 , , ,, 6,019
1S05 » • . . t , 11,779
18'96 « • . . , , 8,063
1897 • • • • . * , , 10,686
1893 ■ • . . a . 7,530
1S99 15,659
1900 11,997
1901 •• 16,027
....._______ ... . . __ . ______


â– 48

china.

wegian (lag was absorbed in the 1 per cent, of other flags, its place
being taken by the United States with 2 per cent., and Russia
with 1 per cent. That the percentage of British tonnage should
have fallen off so considerably is due to the strenuous efforts made
by Germany and Japan to compete for a share of the carrying
trade on the coast of China, to the increase in the size of the mail
steamers which German companies employ on their Ear Eastern
line, and to the development of the Japanese steamship services,
with the United States and Europe.

As regards the tonnage engaged in the carrying trade between
China and foreign countries, the United Kingdom has remained
stationary.

Exteued.

And in spite of an increase of entries to the extent of 2,163—
1,813,724 tons—in respect of coast trade her percentage, 54'46 in
1901, is only 0'85 above that of 1S96.

It was not to be expected that we would be allowed to retain:
for ever our former supremacy in the matter of the carrying trade
but the opposition we now have to encounter is by no means to he-
despised, and should our percentage of the gross tonnage go on
dwindling, at the rate of the past five years, in 1926 the British
flag will represent only 4 per cent, of the whole.

It is to be presumed that the ocean carriers know best how to-
defend their own interests, although to an outsider it is not clear
why, if it pays the German and Pacific Mail lines to cater for the
large passenger traffic they have gradually built up, the Peninsular
and Oriental Steam Navigation Company should so systematically
have neglected to avail itself of its opportunities.

There would appear to be an arrest of the development of
earlier traditions when a company, which started to trade with
Spain and thence extended its operations to India and Chinar
decides to suspend all effort east of Colombo, and allows others to
secure what, by exercising foresight and enterprise, it might easily
have had for itself.

So far as the coast trade in China is concerned, the British
companies and their associate, the China Merchants Steam Naviga-
tion Company, occupy a very strong position in that between them
they possess all suitable wharfage and godown accommodation at
most uf the ports. But energy and determination will in the end
overcome initial difficulties, and the method adopted by the Japanese
companies of running their steamers to schedule time is a most.

Year. Number o£ j Vessels. 1 Tons. Percentage Imports, i carried. Exports.
ISOB .. 19 JL .. 2,68(5 3,005 3 239,891 1 3,293,239 64 55 45 39


CHINA.

49-

.sensible one, and one which ought, to commend itself to everyone
who has experienced the annoyance and inconvenience of having
to remain at a wayside port for a week or 10 days, until it suits
the steamship company concerned to fetch him away. The
Japanese also have the advantage over their competitors in that
they thoroughly understand the requirements of native passengers
and have a lower wages bill.

The natural desire of other Powers to foster trade, under their
own flag, with their recent territorial acquisitions in the China
seas, has seriously curtailed the sphere of operations of British
shipping.

The door has practically been closed to us in Formosa and
Vladivostok, and the inducements being offered to those shipping
goods to and produce from Manchuria via Dalny may, at no very
distant date, have the effect of driving 150,000 tons of British
shipping away from Newchuang.

AT.—Inland Steam Navigation.

Owing to arbitrary restrictions in the provisional rules the
privilege of navigating the inland waters of China has not been
made use of by the European trader as extensively as might have
been anticipated, and the Chinese, while availing themselves of the
facilities offered, have confined themselves mainly to the carrying
of passengers. It is in the Kuangtung Kiver delta that the
greatest development has taken place, there being hardly a town
in that region which is not in steam communication with Canton.
Nine-tenths of the launches are Chinese owned, although they
may occasionally fly a foreign flag, and they are for the most part
native built.

Traffic between Soochow, Hangchow and Shanghai is now also
almost entirely carried on by means of steamer-towed junks, and
in this trade the Chinese have to contend with Japanese opposition.
Elsewhere, the trade is insignificant, the total number of vessels
throughout China, registered for inland navigation, being only 232,
and will remain so until satisfactory rules for dealing with cargo
carried by inland vessels are drawn up. There is every prospect
that in the process of treaty revision this will be done.

It must be borne in mind that in traffic of this kind it is
difficult for the European to compete with the native. The most
he can hope for is that, by an extended use of steam, the distri-
bution of imports and the collection of exports will be facilitated.

The Tungt'ing Lake and the reaches of the Upper Yangtzu,
above the rapids, are perhaps the only waterways on which foreign
capital might establish itself, aud it is to be hoped that some
attempt in this direction will shortly be made by British firms.

The Japanese Government have already guaranteed a subsidy
of 6 per cent, per annum, for a period of five years, on a capital of
] 53,124?. subscribed by the Hunan Steamship Company, to run
three steamers between Hankow and Ch'ang sha and thence on to
(179) d


â– 50

CHINA.

Hsiang-t'an. As the steamers can only run for 9 months of 12
the venture may not prove a financial success, but the spirit of
enterprise is there, and will make itself felt in more than one
direction.

Expert opinion would seem to have decided that steam naviga-
tion of the Yangtzu rapids is impossible, and it would be well to
concentrate attention on what might be done above the rapids, on
the comparatively clear stretch of water between Wan-hsien and
Hsli-chou (Sui-fu).

VII.—Emigration.

Hitherto Amoy has constituted the northern limit of the tracts
of country whence coolies emigrate to America and the Southern
Seas,* but last year a trial was made of shipping coolies from
Foochow to Madagascar. It cannot have been very successful as
it is reported that they have been sent back to Foochow in the
course of the present year, possibly owing to the outcry of rela-
tives, who received no remittances. A further consignment, all
Roman Catholics, was despatched to Reunion in September, and
there is not likely to be trouble with them, as round about
Foochow the Roman Catholic religion has been established for
centuries, and the heads of the church will see that their proteges
receive fair treatment. North Borneo and Sarawak have also in-
dented for Foochow coolies, but for various reasons the initial
friction of starting a new experiment has not yet been overcome.
The same may be said of an attempt to export skilled labour from
Ningpo to the Straits Settlements.

VIII.—revenue.

The only item of revenue in China, with regard to which it is
possible to obtain accurate figures, is that collected by the Imperial
Maritime Customs. Assuming that Mr. George Jamieson's figures,
given in his report of the revenue and expenditure of the Chinese
Empire (Foreign Office, Miscellaneous Series No. 415 of 1897) are
correct, the revenue so collected amounts to over 25 per cent, of
the whole. It is, however, possible that in his average balance
sheet, based on the figures for 1893, the other items have been
under-estimated, and since then China's Budget has -increased
enormously.

In 1901 the total collection of the Maritime Customs amounted
to 25,537,574 Haikuan taels (3,777,435/.), or about 3,000,000 taels
in excess of the average collection of the last 10 years. It was
made up as follows:—

* The influx of Shantung coolies into Manchuria can hardly be considered us
emigration, inasmuch as the men return annually to their homes,


CHINA.

51-

Seeing the great disproportion between the volume of imports
l'rom and exports to foreign countries, it may seem strange that
the export duties should exceed the import duties. The explana-
tion is that the export duties include a sum of 4,396,673 taels
export dues on native opium and produce for native consumption,
carried from port to port, in vessels of which the Maritime Customs
takes cognisance. Eoughly four-fifths, 19,825,444 taels, of the
revenue is derived from foreign and one-fifth, 5,712,130 taels, from
the home trade, towards which native opium contributed 1,942,000
taels.

Since the drawing up in 1858, on a 5 per cent, basis, of the
import tariff, the rise in the silver prices of imports gradually
reduced the duties thereon to something over 3 per cent., and the
Powers in the Final Protocol, signed on September 7, 1901, ac-
cordingly agreed to a raising of the tariff on maritime imports to
an effective 5 per cent. This provision was not, however, put into
force until November 11, 1901, and lias not appreciably affected
the revenue returns of the year.

China is at present engaged in making every effort to have the
import tariff still further increased, and to have the export tariff
recast, and it remains to be seen what terms she is prepared to
offer in exchange.

She is also trying to devise various new forms of taxation,
such as house taxes and stamp duties, which, to judge by results
so far, are certain to be extremely unpopular and not at all likely
to prove productive.

The internal economy of the Empire, not having fully re-
covered in the course of the year under review from the grave
shock it sustained in 1900, there is little to chronicle under this
heading.

The K'aip'ing Coal Mines were sold to a British syndicate,
which is endeavouring effectively to develop its new property.
Little is heard of the quicksilver mine, quietly working in Kuei-

IX.—Mines and Railways.

Amount.
Import duties Export „ Coast trade duties Tonnage dues Transit duos— Inwards Outwards ., Opium likin— On foreign opium .. On native „ Haikuan taels. 715,537 201,595 3,428,82S 541,703 Haikuan taels. 8,556,700 9,122,270 2,161,380 809,561 917,132 3,970,531



CHINA.

chou, and the only mine which appears to have clone well is that,
whence the Han-yang Ironworks derive their ore at Ta yeh in
Hu-pei—60 miles below Hankow.

Being a Chinese semi-official undertaking particulars regard-
ing it are unobtainable, but the output must exceed requirements,
as 69,000 tons of ore were shipped in 1901 for the use of the
Japanese Government foundry near Moji.

The Japanese steamers, by which under special arrangement
this ore is shipped, bring across coal for the use of the ironworks,
but good coal having been discovered near P'ing-lisiang, in
Chianghsi, a railway line is being built to bring it down to the
Hsiang River, on which Hsiang Tan and Ch'ang slia lie, whence
it can be taken to Han-yang by boat across the Tung t'ing Lake.
Part of this line is already open to traffic.

Work on the Lu-han line was, on the northern section, con-
fined to repairing the damage done by the Boxers, and on the
southern section was carried up to near the borders of Hontui, trains
running thrice a week from Hankow to Kuang-shui, a distance of
96 miles.

On the anniversary of the accession of the Emperor of Russia
in November last, a little over 10 years from the date of its com-
mencement, the Great Trans-Siberian Railway stood completed,
and Vladivostok, Port Arthur and Newchuang are now con-
nected by rail with Europe. A very great deal more, however,
remains to be done before the railway can pose as an efficient
passenger or goods carrier.

The Shantung Railway, which is going to connect with the
Tientsin-Chinkiang line at Clii-nan, the capital of the province,
and which has exclusive rights over the coal-fields of Wei-hsien,
Po shan and Puts'un, was completed as far as Tso slian—90 miles
from Tsingtao, or about a third of its total length.

The whole of the Po shan valley is said to be one vast bed of
coal, and in" the immediate neighbourhood thereof are the iron ore
deposits of T'ieh-shan and Chin-ling, the ore of which is supposed
to contain an unusually high percentage of iron.

The Indo-China-Yunnan line has not made much progress,
and owing to the small amount of water in the Red River for
many months of the year, it is difficult to see how material, in
large quantities, can be laid down in China until Laokay is in
communication with the sea. As there is small likelihood of the
Vietri-Laokay section of the Tongking Railway ever being a
financial success, and the engineering difficulties it entails are not
to be despised, some years may elapse before it will be possible to
begin work in earnest.

There can be no boubt of the fact that China is beginning to
realise liow important it is for her to endeavour seriously to
approach the problem of developing lifer mineral resources, and the
tentative rules, published in the spring of this year, afford an
indication that she is prepared to go farther than she has ever
gone before.

As they stand these rules are somewhat impracticable, but


CHINA.

m

wifcli judicious revision, on approved models, they should serve
their purpose.

Nations are unfortunately not at one as to the principles of
economics, which go to build up national wealth, and although, in
the multitude of counsellors there may be wisdom, China may
well be excused if she pauses somewhat before committing
herself.

The case of Japan, which country finds itself compelled to
remodel its mining regulations, as they do not attract the indis-
pensable foreign capital, may influence China, and lead her to
adopt from beginning, regulations with regard to mines and rail-
ways, which will prove mutually profitable to all conccrned.

X.—Suggestions for Extension of Trade.

After what has been stated in Section I of this report, it
would seem superfluous to endeavour to indicate possible methods
of extending trade. In the hope, however, that the apprehensions,
therein expressed, may prove to have been without foundation,
and that the recuperative power of the country will once more
assert itself, the following suggestions are submitted for the con-
sideration of those interested.

His Majesty's representatives in foreign countries have of late,
with singular unanimity, been urging that it would be of material
assistance to the British merchant were he to place himself in
direct communication with his customers, by speaking to them in
their own language.

It is true that classes for the study of Chinese have been
instituted in the United Kingdom, which in course of time will
doubtless turn out good Chinese scholars, who will at the same
time prove capable men of business. But more might be done on
the spot. Principals should afford facilities for learning the
language to young men, who are likely to interest themselves in
the country, and with regard to whose qualifications in other
respects they have satisfied themselves. No firm can afford to
maintain purely ornamental interpreters, and to ask anyone, with
110 taste for languages nor any sympathy with Orientals, to devote
his spare time to an uncongenial task, would be futile.

Many youths, to whom the study of Chinese offered 110 attrac-
tion in London, might, given proper encouragement, take it up out
here, as tliey would have constant opportunities of airing their
newly acquired knowledge, and be thereby made to feel that it
really could be put to some practical use.

The difficulties of acquiring a working knowledge of colloquial
Chinese have been exaggerated, and so much is now known of the
way in which native trade.is carried on, that only, in very rare
instances, need energy be misapplied by learning Cantonese, when
it is proposed to station the budding sinologue at Hankow.

In addition to being able to converse, an acquaintance, up to a
certain point, with the written language is essential.


â– 54 CHINA.

It speaks very highly indeed for the business integrity of the
Chinese, that almost all European banks and mercantile houses in
China conduct their business without having in their employment
one single white man capable of checking in the slightest degree
—be it even to the extent of reading simple numerals—documents
submitted by native shroffs, concerning transactions running into
thousands of pounds.

That this should have been possible in the past may be used as
an argument against the present proposition, but the conditions
of trade in China are changing radically. It is therefore impera-
tive for the British merchant to adapt himself to this new state of
things, and to place himself in a position efficiently to grapple
with the problems of the future.

The gradual opening up of the interior, too, to which all look
forward so anxiously, will necessitate the training of a staff of
young men, who will be able to protect their employers' interest
in places, where English is not known, and where to trust to the
average English speaking Chinese interpreter would, in nine cases
out of ten, be disastrous.

It cannot be said that the advocacy of this policy is a farther
instance of official dilettantism. It has been tried, and wherever-
tried has been crowned with conspicuous success. At least two
large British trading associations—entirely unconnected with the
importation of munitions or vessels of war—have employed
Chinese speaking agents to travel about the country, and to judge
by the consequent extension of business, must have reason to
congratulate themselves on their pioneering enterprise.

It is not without significance that of late there has arisen so
large a demand in mercantile circles for retired Consular officers,
who, it is to be presumed, are engaged at a large premium, not so
much for their acquaintance with business as for their knowledge
of Chinese.

It stands to reason that a knowledge of the language implies
a more intimate knowledge of the people, their ways of thinking,
and their requirements.

Much can be done by judicious advertising, appropriately
illustrated, but with one or two exceptions the advertisements
usually displayed convey little or nothing to the native, who is
not in contact with foreigners, or who has never visited a large
treaty port.

It is the fashion to rail at the abyssmal ignorance of Chinese
regarding things European. An almost equal amount of ignorance
prevails in Europe regarding things Chinese, and anything which
tends to remove misconceptions or to lead to a closer mutual
acquaintance is deserving of support.

As an instance of the astounding statements one occasionally
meets regarding China, may be cited a letter, signed by an East
India merchant, which appeared in the June number of the British
Trade Journal, and with every appearance of authority, informs
the readers of that useful publication, that a large proportion of
the needles imported by the Chinese " are employed as ornaments
for decorating the tombs of their ancestors."


CHINA.

55-

Aii extended field of distribution for machinery appears to be
opening up.

Flour and rice mills are, at the large centres, superseding native
methods for treating rice and wheat. There seems an inclination
to adopt foreign presses for dealing with bean products and
extracting vegetable oils. Numerous enquiries are being made
after engines to assist in various kinds of local manufacture on a
small scale, and there are many other indications of a recognition
of the superiority of machinery over manual processes. It may
be as well, however, to state beforehand that it will prove of little
use to address to His Majesty's representatives in China English
circulars and illustrated price lists, setting forth the merits of
machinery of this kind. Ocular demonstration of what a machine
can do is what pleases the native best, and tends to lead to
immediate business. A leading firm in Shanghai some months
ago established a show room in which types of machinery are set
up, with a small engine to drive them, if the customer wishes to
see the wheels actually go round. The results are said to have
been beyond expectation, and the example would be well worth
following.

There is at the present moment a Bill before the Senate of the
United States, providing for the erection and maintenance in
Shanghai of a building, to be used as a permanent exposition of
American manufactures and raw materials, and the proposition is
receiving very cordial support.

The total cost is not to exceed 275,000 dol., and it is anticipated
tliat the undertaking will pay for itself. While doubting if these
expectations will be at once realised, it must be conceded that the
idea is an excellent one. By every mail importers receive samples
of goods, which it is thought will suit the local market, but the
clientele thus reached is necessarily a limited one, whereas a
permanent exposition would come prominently before the public,
and would most likely prove a great attraction to intending
purchasers.

So many things, to tempt the fancy of the native, are imported
by those anxious to push trade, that the obvious propriety of
endeavouring to supply what the native has long been in the habit
of using would appear to have been overlooked.

Has any attempt ever been made to discover whether or not
it would be profitable to manufacture by machinery hats or shoe-
uppers for the millions of China? The wealthier classes, as
elsewhere, go to their own particular hatter or shoemaker, and
the native of eaeh province in addition affects certain peculiarities
in the matter of hats and shoes, but there must be a large pro-
portion of the population too poor to indulge in fads of this kind,
who would readily buy the foreign-made article, could it be laid
down more cheaply than the home-made one.

Has it suggested itself to any one to imitate Chinese table
accessories, spoons, wine cups, saucers, and chop-sticks in electro-
plate, or to devise an efficient and acceptable substitute for the
long ribbon which confines the foot of the Chinese trouser—male
and female.


56

china.

While in some articles of European origin, which have estab-
lished themselves permanently in China, such as umbrellas,
matches, socks, towels, singlets, &c., it would be difficult for us to
compete with Japan, there would seem to be no reason why, in
lamps and hardware, we should be cut out by the Continent of
Europe.

It might not prove remunerative for any individual firm to
send out a representative to China to study the local market, but
the precedent established by the Blackburn Chamber of Commerce
of sending out special commissioners, with expert knowledge of the
trade of their district, might well be adopted.

No official can have expert knowledge nor give expert advice.
He goes mainly by personal observation based on erroneous data,
or collects such scraps of information as those already in the kade
think they can with safety allow to be made public.

Trade never was nor ever can be extended by official influence,
its expansion must be the result of individual effort on the part of
the merchant, and if anyone has reason to suppose that there is a
likelihood of China proving a remunerative market for the specialty
in which he deals, and he is prepared to spend a certain amount of
money in finding out whether his supposition be correct or not, he
ought in the first instance, to make up his mind to defray for six
months the expenses of a special expert agent to study local con-
ditions of trade on the spot. The 700/. to 800/. so expended might
in the end return a handsome profit, or again, it might avert a sub-
stantial loss.

A recent writer has called attention " to the hallucination,
which exists regarding the foreign trade of the people of China, and
to the anxiety of the Western nations to secure it at any cost, as
if dense population were the measure of commercial possibilities."
He goes on to compare China's foreign trade (population
400,000,000, trade 69,000,000/. sic) with that of the Argentine
Republic and Chile (aggregate population 8,000,000, trade
80,500,000/.), and states that "this is the difference between the
inertia of old age and the activity of youth." The comparison is,
however, defective in that it leaves out of account the immense
volume of China's internal trade.

For centuries China has been independent of the outside world,
and left to herself could easily continue to be so. What the
nations of the West have to struggle for is their share of the supply
of the luxuries to which she is accustoming herself, and for which
she can only pay 1 >y developing her mineral resources.


CHINA.

57-

Note.—It has become the practice to cavil at undue delay in the
matter of the compilation of Government reports, and it may cause
remark that a review of the trade of China in 1901 should not
be despatched until August, 1902.

That this should be the case is due, (1) to the unusually late
publication of the Chinese Customs Keturns of Trade, which are
not even yet obtainable in their complete form; (2) to the non-
resei.pt of certain important Consular trade reports; and (3) to the
writer's connection with the Treaty Revision Commission, which
for the last two months has absorbed the major portion of his
time.

Subsequent events have to some extent modified the general
situation as described in Section I, which was written early in
June, and insufficient information, on which it was not deemed
advisable to wait longer, render the concluding sections somewhat
incomplete.

Rather, however, than run the risk of publication being
deferred until 1903, it lias been deemed advisable to send the
review off as it stands, and it is hoped that its shortcomings will
receive consideration on these grounds.

(179)

e


LONDON

Printed for His Majesty's Stationery Office,
By HARRISON AND SONS,
Printers ir Ordinary to His Majesty.
(1400 11 j 02—H & S 179)

PAGE 1

No. 2912 Annual Series. DIPLOMATIC AND CONSULAR REPORTS. CHIN A. REPORT FOR THE YEAR 1901 ON THE rrRADE OF CH IN A. Rffil!'ERENCE TO PREVIOUS REPORT, Annual Series No. 1984. Presented to both Houses of Parliament by Command of His JrfaJesty NO VElrfBER, 1902. LONDON1 PRINTED FOR HIS MA,TESTY'S STATIONERY OFFICE, BY HARRISON AND SONS, ST. MARTIN'S LANE, PRINTERS IN ORDINARY TO HIS MA,Tll:STY. And to be purchnsed, either directly or through any Bookseller, from. EYRE & SPOTTISWOODE, EAST '.HARDING STREET, FLEET STREET, E.C.,, a.nd 32, ABINGDON STRE11'i WESTMINSTER, S.W.; or OLIVER & BOxD, EDINBURGH; or E. PONSONBY, 116, GRAFTON STREET, DUBLill, 1902. L Cd. 786-216.] Price Tlweepencfl

PAGE 2

.. Jt .... ,. : .. ; CONTENTS. I. General summary ................................................................................... . Toto.I trade .................................................... ....................................... . Bo.lo.nee 0 trade ........................................ : ......................................... . PAGE 3 4 6 II. Im
PAGE 3

No. 2912. Annual Series. Refere11ce to previoits Report, Annual Series No. . Repo1t on the Trade of China fo1 the Year 1901 by Mr. J. W. Jamieson, British Cornmercial Attache for China. (Received o.t Foreign Office, September 16, 1902.) !.-General Sunwiary . ... Although in the course of the year under review, trade in some part'> of the Empire, had to be carried on under, or was restricted by, the abnormal conditions, arising out of the troubles of 1900, it may prove not tu be without interest to compare the statistics of 1901 with those of, 189G, the year in which commerce recovered from the shock dealt it by the war with Japan. As will be seen from the table given below, the total foreign trade of the country has, since that date, increased by close on . 9,000,000l. Imports for which more silver had to be paid, owing to a fall in the value of that metal of over 11 per cent., show an increase of over 5,500,0001., while exports show an incn,ase of 3,:313,000l. It will be noted that the ratio of exports to imports shows a slight decrease. But it must not be forgotten that the direct foreign export trade of the two ports of Tientsin and N ewchuang, in 1899, exceeded by 1,528,000l. the figures for 1901, and, had trade gone on developing peacefully, last year's total of exports might well have amounted to 29,500,000l., which would have given a ratio of 100: 83 per cent., or practically the same as in 1896. These figures add another to the many illustration!'!, cited by Lord Herschell's Committee, to prove that falling exchange, in the long rnn, has not thc}endency to stimulate exports or check imports. (179) A 2

PAGE 4

4 UIIINA. Table A.-C0:\1PARATIVE Table of China's :Foreign Trade based on the Returns of the Imperial Maritime Customs. Total imports •• ,, exports , , Total trade Ratio of imports to exp01-ts llS 100: United Kingdom Im.ports from Exports to , • Ilong-Kong Imports from Exports to •• IndiaValue. 1896.* 1901.t ----1-----29,605,100 35,185,275 24,488,181 27,801,660 54,093,281 62,986,935 Per cent. Per cent .. 82 I 79 I -----1----I I 7,378,400 1,863,650 15,226,000 fl,100,000 1,266,300 17,798,250 10,664,250 Increase or Deerease. ------+ 5,580,175 + 3,313,479 + 8,893,654 1,278,400 597,350 + 2,572,250 + 1,655,750 Imports from Exports to •• . 1 g,008,500 .. 1 3,838,ooJ 4,282,soo + 444,soo 362,600 465,650 + 103,050 : : I 895,0CO 892,700 2,300 Other British dominionsImports from Exports to , , Total British tmde : : i 39,::::::: 41,::::::: i: 2,8:::::: >II At exchange, 3s. 4d. = 1 Ho.ikuan tael. t At exchange, 2s. lHcl. = 1 Huikuim tael. (NorE.-As regards the above table, attention has to be called to certain defects in the method, according to which the retums of the Imperial Maritime Customs are compiled. The figure11 showing the total foreign trade of the country represent the value of imports at moment of landing, and of exports at moment of shipment. These figures are arrived at by the follow ing process :-From the market value of the net imports is deducted the total collection of import dnty, plus the likin on opium, payable at port of entry, and 7 per cent;. for charges, &c. To the market value of exports is added the total collection of export duty and 8 per cent. for charges, &c. In the case of the figures showing the proportion of trade with each foreign country, however, no such
PAGE 5

CHINA, 5 It Llocs not,, on the face of things, appear sound to fix a profit on goods the prices of which are constantly fluctuating, and the value of which is, in many cases, arbitrarily assessed by the customs themselves. To ensure accuraey and to facilitate comparison, it would seem desirable that the figures for imports and exports be throughout ealculated on one and the same basis. Further allowances ha.ve to be made in respect of the figures showing the proportional trade of each nationality. Certain goods carried on British ships, for in stance, may be entered as coming from or going to the United Kingdom, whereas their real provenance or destination may be i:;ome other country. Another point not to be lost sight of, is the deceptive nature of the returns in respect ot goods imported from and exported to Hong-Kong. A great deal of non-British optional cargo is brought 011 from that colony, and large quantities of purely Chinese pro duce is sent there from the southern ports for transhipment to other ports in China J. , The aggregate of British trade, which in 1896 formed 56 per cent. of the whole, has, according to the Chinese returns, declineil to 51 per cont., and direct imports from the United Kingdom would appear to have fallen off to the extent of 15 per cent. what the true figures may be, it is almost impossible to ascertain, as neither the Chinese tables nor our own can be said to furnii;h accurate data with regard to the JJlace of origin of goods therein enumerated. The returns, for instance, given for the year 1896, in the Board of Trade's Annual Statement of the trade of the United Kingdom with foreign countries, put the exports to China at 6,717,353[., and the imports from China at 2,973,887[. These values are the values at ports of shipment and values on arrival respectively. The import figures, if reduced to a common basis, practically agree, but the large difference of l,110,237l. in the case of exports is less easy to account for. A not unlikely solution is that the excess is made up of optional cargo, or of transhipments at Marseilles, which may have been classed in the Chinese returns as shipments to the Continent of Europe, and properly recorded in our own returns as imports from China. At the time of writing the British figures for 1901 have not been received. As regards other countries the comparative figures for the two years are:-(179)

PAGE 6

6 United StatesImports from Export.s to •• . . Continent of Europe (exelud ing Russia)llImports from Exports to .. CHINA. Value. 1896. 1901. at: 2 000000 1;ss4:ooo 1,572,000 3,013,000 3,476,000 2,458,00J 2,521,500 4,329,000 Increase. 1,476,000 604,000 948,500 1,316,000 "" In 1900 Hamburg imported from China 1,426,000l. and exported to China 1,464,000l. worth of goods. (German trode returns.) Imports from Japan chow an increase of roughly 2,000,000l. to 2,500,000l. From the above it will be seen that in spite of a consider able fall in the value of silver, and in spite of the fact that in terms of hel' treaty with Japan, China in 1895 added some 37,500,000l. to her foreign debt, the import trade has in five years increased by 19 per cent., a percentage which had it nut been for the late outbreak would probably have been exceeded. The present year, however, finds China saddled with a further addition to her debt of 67,!iQO,OOOl., originally converted from gold into silver at 3s. per Haikuan tael ( =450,000,000 taels), the silver equivalent of which, along with that of her previous debt, is being augmented to a very disquieting extent by declining exchange. The shrinkage moreover in her receipts, caused by the mortgaging of the major portion of her revenues for the service of the indemnity claims, is bound to lead to heavy internal taxes on trade, and one may assume that her purchasing capacity for some time to come will be seriously affecter! thereby. While it is true that it is the unexpected which is for ever happen ing in this country, yet the situation with which she is confronted does not disclose a bright prospect. Her only hope of economic salvation would seem to be an immediate and extensive
PAGE 7

CHINA. 7. Another. aid to the development of exports would be the. cop;i-: plete abolition of all internal and maritime duties on produce .for: shipment abroad. The adoption of such a course, however, is improbable. In the first place, rudimentary knowledge of the , principles of economics is lacking in the minds of most Chines.e officials, and, even could a faint perception thereof be instilled; the dire straits for ready money, in which they find themselves,. would be sufficient reason to prevent them from giving up the. revenue of a day, on the theoretic assurance that it would be made good, with interest, at no very di,;tant date. It the second place the maritime export duties are pledged to European creditors, and and as Lhey amount to about 1,300,000l., some other equivalent, security would have to be substituted therefor. . Evidence of a realisation that something must be done is afforded by the fact that, in March of this year (1902) the Chinese Foreign Office published a set of mining regulations, which, while being still far from satisfactory, constitute a con siderable advance on previous legislation of the kind. It is now thereunder possible for foreig11ers to work mines, in conjunction with Chinese, without any arbitrary restrictions as to proportion of joint capital. The people and the officials nre instructed to afford every assistance to prospecting parties, and an attempt is niade to lay the bogey of Jeng shiii. A further indication of pro gressive thought is the acceptance of a proposal made by the B1:itish Treaty Revision Commission, that the export duties on tea be re-adjusted on the basis of 5 per cent. ad valorern, in the hope that it may yet be possible to do something towards reviying this onee flourishing trade, Many attempts~all unfortunately abortive-lmve been made to arrive at some conclusions with regard to the balance of China's trade. The only approximately accurate figures available are those given in the returns of the Imperial Maritime Customs. The data, which they furnish, are, however, far from complete, and as regards the rest one has to fall back on guesswork. One feels sure that the traus-frontier trade in the North, North-West and West of China must show a balance in China's favour. One know
PAGE 8

8 CHINA .. interested in missionary enterprise is yet another item to be taken into consideration. On the other hand it has to be borne in mind that 011 the debit side of the account there have to be included the large annual payments for the service of the foreign loans. T1w amounts due in 1901 were 3,750,000l., of which only 910,44:U. represented repayment of capital, leaving a balance in respcet of interest of 2,839,558l. China has no trans-oceanic steamship service of her own, and of the total tonnage, engaged in the inter-Treaty port carrying trade only a little over 17 per cent. being under the Chinese flag, she has not only to pay freight on her exports to outsidel',;, but the major portion of freight on her home trade as well. Table B (1).-IMPOHTS and Exports during the Years 1891-1!)00. 1891-96. Imports. Exports. Yeur. ----------------------Merchandise. Silve1•.*' Merchandise. Gold.*' Silver.~ I 28,276,500 1891 1892 1893 1894 1895 • • 2:,,42s,ao9 I •• 2~,444,480 I 2,127,0~7 22,316,533 4,224,ln 1 24,571,234 5,999,52G 126,034,0WI 12,350,714 28,406,936 25,519,430 25,977,963 23,135,328 26,280,612 850,000 I 7G9,922 1,830,00J ! 1,050,442 2,200,000 : 2,030,707 1' .. 1,023,00:) , , 7,933,707 I 1,820,3C4 Total 129,320,26\J I 1896-1900. Imports. Exports. Year. Merchandise. Silrcr.* l\ferche.ndise. Gold.*' -----------------1896 1897 1898 1899 1900 Total 29,605,100 26,501,469 26,616,025 35,214,824 28,849,700 146,787,118 286,666 244,522 682,250 191,378 350,954t 24,488,181 27,086,572 25,559,812 32,754,838 27,422,242 1,665,00) 1,485,500 1,180,40 l 1,037,250 736,180 1,755,770 137~311,645 -6,104,300 I * Net. t Avernge previous four yeo.ra.

PAGE 9

CIIINA. 9 TalJle E (2).-PAYl\!ENTS due by China in respect of Interest aucl Redemption of Foreign Loans during the Years 1891-1900 . .Amount. Year. Redemption. Inlcrcst. 18()1 252,000 126,310 1892 312,000 80,770 1893 337,000 67,24,2 1894 337,000 4i,027 1895 325,000 292,762"' -----Total, 1891-95 1,563,000 620,111 ----1896 229,0i8 1,386,625 1897 4.0!,191 1,910,537 1898 391,331 2,184,053 1899 553,860 2,fl92,273 1900 777,417 2,836,981 ---Total, 1896-1900 2,355,877 ll,010,469t * 114,4.50l. silver lonn at 8s. t 572,250l. silver loan at 3s, 1891-95. Exports, including gold and silver Imports ,. silver •• Excess exports over imporl! Deduct interest payable •• Balance in fnvour of China 1896-1900. Imports, inolllding silver , • Exports ,, gold • , Excess imports over exports .Add interest payable Bnfonoe against, Chinn. Vnke. " II 139,0~4,840 •• 138,384,770 1----., • 689,570 620,111 '-----69,459 j Vaine. I ____ _ 148,542,888 143,415,975 5,126,913 11,010,469 16,137,382 If one goes back to the beginning of the decade, and divides it into two periods of five yearE, the one-1891-95-terminating with the close of the Japanese war1 and, the other-1896-1900-

PAGE 10

10 CHINA. concluding with the suppression of the Boxer rising, one finds that, at the end of the first five years, China had a balance in her favour, as far as her foreign trade was concerned, of G9,459l., whereas that at the end of the second quinquennial period this favourable balance h'1d been converted into an adverse one of 16,137,3821. ( Vide Tables B (1) and (2).) [NoTE.-Table B (1). Up to 1893, the year of the cloi;ing of the Indian Mints, China was an exporter of silver. Since then she has been an importer, until l901, wheri she exported 900,000l. worth of that metal. In the column, imports of silver, the import for 1900 is given as 350,954[., that being the average import for the four years 1896-99. As a 1atte~ of fact, China actually imported in that year 2,396,6551.* This abnormal increase being due to the enormous quantities of dollars imported for the use of the foreign military contingents, may, for purposes of statistical comparison, be written down. The export of 1901 waq probably due to a part return of these excessive imports, rendered possible by the withdrawal of the allied forces, the dollars, which passed into circulation throughout North China, in 1900, setting free a corresponding amount of silver, which was available for export abroad. Exchange having occasionally fallen below the parity of sil v~r, Jnclia came forward a$ ,a_ purchaser of Chinese silver.] The trade balance for 1901, worked out on the same basis, is as follows :-Imports Expol'ts gold sih-er ' Excess imports over exports .• ' Add interest payable Vo.Jue. Total. 27,801,660 1,500,000 900,000 i 35,185,275 .. -----: 30,201,660 ,------' 4,983,615 2,839,558 ' ' Balance against China ----,----7,823,173 ---------------------In 1902, to China's other obligations has to be added a sum of 18,829,500 taels in respect of indemnity payments. Converted at 3.s. this represents 2,824,4251., which China has _to pay in gold. At present, however, the Haikuan tael is only worth 2s. 71\,d., which makes the silver equivalent 21,822,519 taels, or an increase of 16 per cent. in the amount, for which she expected to have to provi,de. , , , _ To go back to the figures in Table B (1), a comparison of,_the trade of 1891 with that of 1900 shows that the volume of trade • This ,does not include further Inrge sums imported by ships of wur and Government transports, of which the C!Jstoms authorities necessarily could .not have cognisance.

PAGE 11

CHINA. 11 -excluding bullion-expressed in sterling is practically thesame in both years. Expressed in silver there has been an increase of 57 per cent. Comparing the two quiuquennial periods the following results are obtained:-Total volume of trade expres~ed in gold Imports cxpre,eccl m gold Exports ,, ,, Total volume of trade expressed in silver Imports expressed in siher Exports Increase. i---.--1 Per cent. • . 12 •• I 17 ' 6 50 47 34 As has been observed, it is notoriously dangerous to dogmatise on any subject as far as China is concerned, but the feeling that she is standing on the eve of a very grave economic crisis, which must act and react with far-reaching consequences, can hardly be resisted. Whatever the outeome may be, our interest in the situation ought to be a very keen one, because, small as our export trade to China may seem when compared with that to other and wealthier customers, questions vitally affecting a market which offers such promise for the future cannot afford to be neglected nor lightly passed over. II-Imports of Merchandise. The market value* of the net imports of merchandise during 1901 was 39,686,475!., this total being made up as follows:------Arti~ ______ i __ v .. 1ue. --Cotton goods Opium Kerosene oil Sugar Metals Woollen goods • • • • Sundries (unenumerated) .. Total •• 14,740,H!l 4,871,850 2,557,991 1,990,543 1,542,572 699,257 13,284,071 39,686,475 The year 1900-being the year of the troubles-is useless for purposes of comparison, and trade not having fully recovered in 1901, it is perhaps hardly fair to institute a comparison with 1899, in the course of which year the foreign trade of China was "characterised by an astonishing development, eclipsed all previous " Vid~ pote1 Taple .A., pp. 4 ii.nd 5.

PAGE 12

12 CHINA. iecords, and showed an advance ~ithont precedent." (Customs' report for 1899.) Nevertheless, in 1901 China could afford to import goods, the sterling value of which fell below the sterling value of the impor tations of 1899 (39,850,150[.) to the extent of 163,675l., but for which she had to pay 3,554,462 taels more in silver. A com parative table of the quantities of cotton and woollen goods imported during 1899 and 1901 is given below.

PAGE 13

CHINA. 13 Table 0.-00:'vIPARATIVE Table of Imports of Cotton and Woollen Goods during the Years 1899 and 1901. ArUcles. -------------CoTl'ON GooDs. ShirtingsGrey, pie.in , , White ,, figurecl, broca,ded ancl spoLted Dyed, pl!!,in , , ,, figured, brocaded and spotted Je.pe.nese T-cloths •• ,, Indie.n ,, Jripe.nese DrillsEnglish Indian Dutch Americe.n Je.pe.nesc Jee.ns English Dutch American SheeLings English Indian Dutch Americe.n Jape.neae Chintzes, furnitures nnd plBin cotton prints. , Twills, printed. , Turkey-red cottons Cotton lastings, plain and figured Cotton de.me.sks Veivets .. Velveteens Je.conets, ce.mbrics, lBwns, mus lins e.nd dimities He.ndkerchiefs , , ,, Jap1mese Towels ,, ,, Japanese ,, Cotton fle.nnel • , ,, Jo.pe.nese J e.panese cotton cloth .. ,, cre.pe., Ye.rnEnglish Indie.n ".! Je.po.neae Hong-Kong., Thread ,, Pieces " " " " " " " " Dozens " " " Pieces " " " Piculs " " " "i "I QuanLiLy. 1899. I 1901. ___ I __ _ 5,130,896 2,753,532 56,682 118,189 85,949 8,630 1,199,203 83,937 242,652. 78,887 4,460 40,170 l ,626,107 9,577 76,0lG 30,690 126,303 763,762 40,532 45 3,975,903 31,820 520,5U 24,0::>7 322,9iG 940,672 17,G54 30,853 2,424 247,171 678,356 21,739 550,0a8 209,062. 397,469 176,676 181,016 73,069 58,703 1;906,426 779,700 3,815 I I. 4,121,655 2,476,846 169,815 174,172 14,029 918,110 15,320 298,608 78,616 1,019 32,928 1,649,626 23 41,083 14,44-0 97,368 397,443 2,620 1,262 2,840,518 13,006 3!)5,667 55,883 192,930 1,614,103 . 23,507 53,431 6,065 260,402 430,183 26,675 202,616 294,176 371,087 164,255 112,268 102,685 52,556 1,716,983 498,116 5,208 3,446

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Cottom. 14 CHINA. COMPARATIVE Table of Imports of Cotton and ,voollen Goods d1;i.ring the Years 1899 and 1901-continued. ---------.. ---------------------------------Quantity. Articles. 1899. 1901. -------WooLLEN Goons. CnmletsEnglish I Pieces 61,968 59,883 Dutch ,. 125 5 Llllltinrs -55,908 23,188 Long ells 102,096 95,485 Bpnnish stripes.. . . . 1 " 37,988 46,058 Cloth, brond, medium, he.bit, nnd Russi:1n •• " 16,622 23,2!'.18 Lustres 11nd Ol'iee.ns, pluin •. i 2,693 5,117 " figured .. " 1 3 524 Blnnkets .. .. Pnirs .. 52.86 28,175 Union Ol' poncho doth Pieres 3.943 6,668 Flannel .. .. I 2,195 3,770 It11li11n cloth .. Pi~ule .. 50,746 82,489 Yurn and COl'd . : ,836 4,465 As a matter of fact, during the last decade, the trade in cotton goods as a whole has rernaiued practically stationary, the falling off in one class beiug made good by an increased import of anot.her. There has been an advance in the import of--------------------Q_iinntity. Articles. I _ 1891. _. -l--_:901. _ Pieces. I Pieces. E61,59l . I 1,649,626 17,!H7 I 97,3(j8 Amnican drills , • " je11ns •• and a mark8ll decrease in the import of Indian T-cloths: 189-!, 249,235 piect:s ; 1901, 15,320 pieces. . The import of Japanese T-cloths, cotton flannel (American and Japanese), and Japanese yarn has advanced rapidly and to a large extent. The figures are-Articles. "J e.pe.nese T .cloths •• .Americe.n cotton fiannel Je.pe.neee ,, ,, ,, yam .•. Pieces " " Piculs Quantity. 1894. 2154" 47'.611 68,685 31,104 1901. 29R,608 16•t,255 371,087 471,531

PAGE 15

CHINA. 15 The demand for Italian cloths-cotton and woollen-has also grown in a marked degree, the reason being that the finish of these goods has been so improved in recent years that they are being widely used in place of silks. Low exchange is creating a demand in sheetings and drills for goods of a lower quality than hitherto imported. And in Northern and Central China American competition is making itself felt in certain classes of grey goods, which made their appearance for the first time last year. A fair share of the American trade is in the hands of British importers, but the Lancashire manufacturerseeing how completely he was cut out in heavy grey goods in the north of China-cannot fail to regard this state of things with apprehension. Competition was formerly restricted to 14-lb. cloths, but the American manufacturer is now cutting into Lancashire as low as 10 lbs., and must continue to do so, so long as he enjoys present advantages in the matter of geographical location, improved machinery and transport rates, The transfer of the mills in the North-Eastern States to the South, in the centre of the cotton country, and the more advantageous rates of freight, obtainable from New Orleans and New York, must tell very greatly in favour of the American as compared with the British manufacturer, who has to procure his raw material from across the seas, take it inland at heavy cost, and when made up take it back to the coast for shipment abroad. The trade in otlier than grey goods must, for some time to come, until Lhe Americans acquire the lrnowledge, born of long ex nflrience, hold its own. Prior to 1889 the customs returns did not sub-divide imported Yarns. ;ams according to country of origin, so that it is hardly p0ssible to say when. exactly Indian yarn finally attained its supremacy over Lancashire yarn in this market. As is the case in India, the import of British yarn into China is now entirely confined to the higher counts, the extreme range being 24's to 40's, and the average 28's to :12's. The volnme fluctuates between 50,000 to 70,000 piculs per annum, and there is not likely Lo be any substantial decrease until Japan or India take to spinning higher counts than they spin at present. Japanese yarn appeared, for the first time, in 1894 with an import of 31,103 piculs, and steadily gained favour year by year, until in 1899 the market was flooded with the over-production of Japanese mills to the extent of 780,000 piculs. This was followed by a sharp fall of 40 per cent., and last year the import may be said to have been normal. There are, however, indications that over-production in Japan still continues, and that, as China is her only market, she will again flood this country with her surplus stocks. Japan spins for the China trade, principally 16's, using Chinese and Indian cotton. Chinese cotton is whiter, and, generally speaking, somewhat longer in staple than Indian cotton. It also .absorbs dyes more thoroughly than the latter, and the value of yarn spun therefrom commands a price, count for count, 6 to 7 per cent. higher than that of Indian yarn. The question

PAGE 16

.. -Woollens. CIIINA. therefore of bow the Chinese mills will eventually affect the output of the Indian mills is one of great interest, seeing that 95 per cent. of the Indian export of yarn is at present absorbed by China. In Annex A to this section will be found some valuable notes bearing on this subject. There are about 14 mills in Chi11a, say some 460,000 spindles, spinning lO's, 12's, 14's and 16's, and their total out-turn may be set down at 60,000,000 lbs., about half of which is consumed in the Shanghai district, the balance going to ports up the Yangtzu and to North China. This yarn pa)'s, on export from Shanghai to another treaty port, a duty of 0 Haikuan tael per picul, the equivalent of the former fnll import duty on imported yarn. Seeing that Chinese raw cotton is subject to the full incidence of internal taxation, and cotton, imported from abroad, priys import duty, this tax is not a popular one as far as the millowners are concerned. The only charge on cotton spun in Ja pan is export duty from China-if it be Chinese cotton-but it has to be borne in mind that this cotton has paid the sa.me internal taxation as the cotton spun in Chinese mills, so that really Japanese yarn, spun from Chinese cotton, pays a surtax of 0 tael per picul in the shape of export duty, in addition to freight to and from China. It on the other hand enjoys compensation in the matter of coal, which is all produced in the country, and which, on going to China, pays freight and import dnty. Indian yarn, although free from export duty and internal taxation, is handicapped by fr13ight and insurance charges. "" Last year's retums include 49S;1-1 piculs of Hong-Kong yarn, the output of a spinning mill established in that colony with the original intention of spinning Eorueo cotton. As, however, cotton growing in Borneo has not yet got beyond the experimental stage, the Hong-Kong mill spins a mixtme of Burman and Indian cotton, on which no duty is payable. The export so far has been prin cipally to North China, being a set off in settlement of accounts between southern buyers of groundnuts and bean cake and their northern creditors. The yarn is said to be greatly appreciated, and an increased demand therefore may not unreasonably be anticipated. The trade in woollen goods bas Leen a steadily declining one for many years past, and in cntain articles, such as orleans, lustres and figured lastings, has completely died out. In 1886 the total import of woollen goods amounted to 695,066 pieces, value 5,639,071 Haikuan taels (1,406,830[.), whereas in 1901 it fell to 351,950 pieces, value 4,727,371 taels (699,105[.). While exchange has risen, the gold price of woollen goods bas fallen, and it is to be assumed that the increasing variety and comparative cheapness of cotton goods is responsible for this state of things. In the cold climate of the north the poorer classes find it more economical to wear wadded clothes or sheep-skins. Only the upper middle classes, in contact with Europeans, in Central

PAGE 17

CHIXA. IT China, appreciate the adrnntages of woollen fabrics, ancl m. Southern China the ueecl for warm clothing is not great. The frequent wrishings, too, to which native clothing is suli jeeted, may, owing to ignorance of !tow to deal with them, have created a prejudice against woollen goods. It is a very common assumption that the native of China loves dirt and never washes himself or his clothes. Exactly the conversri is the case, the standard of personal cleanliness amongst the lower class Chinese being very much higher than in the United Kingdom or Europe. Seeing the number of pairs of blankets Juclia absorbs in one year-1900: India, 162,900 pairs; China aml Hong-Kong, G9,500 pairs-one might not unreasonably look for an incrcasell import into China. Notwithstanding the steady i11crease in the ~nltivation ancl Opium._ consumption of native opium, Indian opium continues to hold its own, the import for the last five years ha\'ing renwi.,, stationary:IS97 1893 1899 1900 1901 Yenr. Q.uontit;. Piculs. 49,:JW 49,752 59,16[ 40,279 40,484 The excessive import of 1899 is saiu to have lJeen clue to a hacl native crop, ,rncl aclnlt,eration of the native drug. The ac1;ompanying table shows the proportion of the various; kinds of opinm imported during the last two years:------------------Yenr. 1 Mnlwn. P,1tirn. Bennres Pcrsinn. Toto!. _____ 1 _____ ! _____ , ___ . ______ _ ! l'iculs. I Piculs. Pirnls. Piculs. Piculs. 19ro . , ' 2> 945 15,Sfii !l,!lifi 49L Ml,27!l 1901 .. 2i;'iD9 li,462 9,788 435 4fl,,IS.J, -----------Apprehensions are entertained that, if the present adverse course of exchange continues, the import from India will receive a. Herious check, and that the closer scrutiny nnd control, which it is possible to exercise in respect of imported opium, as comparecl with native opium, ,vill tell in favour of the latter. NatiYe grom1 opium is not, in the first place, subjectell to the same regular charges as Inclim1 opium, and opportunities for smuggling and eYasion of taxation en route are very much greater. At Canton,. for instance, the total charges on natirn opium are 1:ot one-fomth of those paid on Indian opium, while the selling price is at least GO per ceut. le$S. Although, in theory, no cliffercntial dues can be le,ieLl on (17!)) ll

PAGE 18

18 CllI'i A. Indian opinm, on ani ml at the place uf consumption, the uew taxes, everywhere being iusLituteLl on prepared opium, which as a rnle contains a considern ble percentage of foreign opium, may also tend to curtail sales thernof. Of the total import :--\6 per cent. goes tothe southern provinces, GO per cent. to Central China, ancl 4 per cent. to the north. The northern ports, such ns Tientsin and N ewchuang, import by sea practically no opium, 1rntive or foreign. Their supplies reach them overland, from the provinces of Shenhsi ancl Honan in the case of Tientsin, and from Manchuria in the case of N ewchuang. The demand of the rest of China, in so far as it cannot be met by home production, is supplied by Ssuch'uan and Yiinnan. No reliable, or eYen approximate, statistics with regard to the total production of or taxation on 1mtive opium are obtainable.* Morphia. . The import of morphia has nearly doubled within the last Hix years, and from ~4.moy, where it was originally iutroducecl probably to satisfy the cravings of retnmed emigrants-the nse of this drug has rapidly extended to Southern and Central China. It is mostly consumed in the shape of opium pills, although the practice of subcutaneous injection is by no rnemrn unknO\vn, and the saving of time and comparative secrecy connected with this form of indulging in opinm have doubtless proved great recom mendations in its favour. It is impossilJle t.o say what effect. the increasing consumption of morphia will have on the import of opium from India. Kerosene oil. Kerosene oil is an article the import of which is stemlily growing, and every fmv years sees a new producing country sern1ing its oil to compete with the older brands. :For a long time American oil enjoyed a monopoly, nntil in 1891 shipments of llmsian c,il commenced, ancl in 1894 Sumatran oil appeared on the scene. Last year Japanese and Borneo oil figured in the. .customs' returns for the first time, and ere long Burma will, it is to be presumed, extend its export to China. Shipme~ts of oil in bulk, by tank steamers, \\ere. started in 1897 by the Shell Company, and the extension of this method of transportation to .almost all the treaty ports of China, coupled with the erec1ion of tanks on shore, wherein to store the oil has, by facilitating distri lrntion, greatly increaseJ consumption. The lowering of prices, in consequence of keener competition, has also had its eITect iu stimulating sales. American oil still heacls the list in the matter Of quantity, and is able to c::nnmand a price some 4d. or 5d. a case higher than that of the other oils, but Hussian and Sumatran oil are not far behind. It is somewhat remarkable that the impor't of kerosene oil iuto Chiua should exceed that into India, and that in this al'ticle, alone of all foreign products, the Chinese should be found brtter .. customers than the natives of the latter cc,untry. In Jwlip. Russian oil has occupied arnl extended the field abandoncll by American oil, and the Director-General of Statistics is of opinion that this transference means merely a question of relative prices. * Fide pp. 4G and 47.

PAGE 19

C:!IIX.A. It is far more likely to iJe the result of an arrangement. arriYecl at, Let,vcen Ameifrirn and Hussian syndicates, as to spheres <1f distribution. The Hong-Kong rcfiueries snpply nearly the whole of tlie Sagur. impol'tecl sugar, lmt during the last few months beet sugar has entered the fieH aml lletermined efforts are being macle to push the sale thereof. The eo11sumptio11 of beet r,mgar in India, whern it firnt appearell in 1893, has made rapid strillcs, and it remains to be seen how the Chi nose will take to it. One is inclined to think that it would not l>e adapted to Ohincsr> use, arn1 the fact that it deteriorates, if kept in stock for any length of tirn~, is certuin to militute against it. If one excludes nuil rod iron, spelter arnl 1111m~11ufactured :Hetals. copper (the imports of which have fallen off co11siclerably), ironware, tin plnte:, an(l steel (the imports of which lrnve corresponclingly incrensetl), there are no violent fluctuations in metrtls to reconl in the course of the last decade. The tlec:rrase in the imporL of nail rotl iron may in part b~ llue to a rise of prices in Europe, lmt it is also prcbably to Le attributed to lhc fact that manufactured nails, imported from the United States and Germany, are corni 11g into more general use. Japan arnl Australia are the priucipal sources of snpply for 1mnrn1rnfnctmcLl copper, n1Hl a rise in hnrne vali1es during t.he last four years may have tended to reduce the import. • Spelter is chiefly used in the native arsenals, but the llemaDtl is not brisk, and in any case, high sterling prices have proved prohibitive. Iron sheets and plutes are gradually advancing, aml this advaHce is to he explained by the large exte11sion of recent years in the out-lnrn of local Llocks aml engineering works. The deYelopment of the trade in kerosene oil, canicd in l1ulk, hy tank steamers, has acted. as a dimnlus .to the import of tin plates, which arc converteLl into tins for holding the imported oil. The steel cbietly imported is wl1at is known as No. German -Rncl Belgian, and British mannfoctnrers. show no inclination to ,compete. It is used for making rough tools, m,d the trnLlc promises lo he a large one. _ '.l."he impol't or hanlwurc is not a large one, as the Chinese manufacture tlieir requirements either from Belgian iron of ,eommon quality or old scrap material. _ The demand for gal vauised sheds is increasing, and in view of the extension oi' mining aml railway enterprise in the interior is likely to continue to do so. while the main staples of impo1 t, with the exception of Sundries. l:erosene oil ancl sugar, have to a great extent remained stat-ionary, .a reference to Table D will show the i'apid strides maLle in certain sundries, notably flour, nrntehes and ~oap. The import of eamlles, cigars and cigarettes, aniline dyes, paints, perfumery arnl umbrellas has also developed greatly. These figures indicat.e a graduul change in native taste, aml a tendency to absorb, more and more, articles of vVestern luxury. (179) n 2

PAGE 20

Cigarettes. 20 CIIIXA. There is no reason why the tra
PAGE 21

CllINA. 21 ,Jn t wanl manifests of s teamcrs, trml i ng in that direction, small consignments of cigarettes to India, principally to Burma. In the course of the last five years the imports of wines, beers Wines. an1l sp;rits has increased very considerably. This incrc::i.se is, of {;Otuse, largely to be attributed to the growth of the European population, but not a little iB clue to the partiality of the native palate to sweet champagne, liqueurs and beer. An innate, and very justifiable, aversion to cold water, taken internally, has hitherto cloB2d the gate to aerated waters of the class with which the liazaars of India are flooded. Chinese emigratirm is responsible for the very large quantities Flour. (Jf Hour imported. North China consumes principally wheat and millet, lmt the staple food of the people south of the Yellow River i.s rice. The emigrant, unable to procure rice abroad, has to adapt 1iirnself to his sunouudings, and on his return shows no inclination to revert to his former diet. At the port of Swatow alone the importation of flonr has increased from 777,866 lbs. in 1892 to lJ,91~1,733 llJS. in 1901. Central Chiua produces wheat of average quality, and mills for grinding flour have recently been started. When two new ones, at present in course of erection, are working, the total out-turn will be 260,000 lbs. per diem. The colour of the flour is, however, inferior to that of imported flonr. The 11tvrntity of rice imported clepetllls entirely on the home Rice. hanest, aml for the last fi.\•e years has averaged 167,000,000 lbs. The bulk of it goes to feed the teeming population of the CaL1ton River delta, aml is supplementary to an average annual import of 270,000,000 lbs. from the Yangtzu basin. Considering China's own natural resources in respect of liquid Indigo. indigo and coal, it is somewhat cnrious to find her an increasing importer of both articles. Of the total import of liquid indigo, -Shanghai, in J 899, absorbed 90 per cent., whereas in the same year -Bwatow exported abroad (not Hong-Kong) over one-third of the quantity imported into the rest of China. Natural indigo in •China, will, as in lmlia, have in the near future to enter upon a severe competitioIL with synthetic indigo, and the result, as in the case of the struggle between aniline and aliz3.rine dyes, cannot 'remain in don bt. As at last there seems a fair prospect of activity on the part of Coo.I. the syndicates, started to develop China's coal fields, one may hope that the large amount of money spent in pttrchasing foreign coal will henceforth remain in the country. The increasing import of , coal is clue to the o-rowth of steamship enterprise on the Yaugtzu, aud to the fact tlt;t the vessels of certain of the Eastem squadrons have, on the ground of economy, discarded Cardiff coal in favour . of .Japanese. lu the nuttcr of matches and umbrellas Ja pan cannot be touched, and as one sP.es isolated cases of Chinese ladies adopting the use of parasols, one may expect that this article also will be • supplied chiefly hy ,Japan.

PAGE 22

22 CHINA. Annex A. The r1uestion of the advantages aml disadvantages of the lnc~ian and spinning industry in China, as compared with India, is one which Cl11nr,c yarn. is still incapable of being answered satisfactorily, as not only are (L) ,\ ,\rnn-ln.~t~ pos;c,red by lh:11,•. (2) Dim,!-, 1::i.u1 :t!:: es ,u!Tcr~d by C!1i1 a. the data for complete compai'ison still wanting, but the China. induslry cannot yet be regarded as in a folly deYeloped state rnnch has still to be clone in China in the trainiug of the mill lrnnc1s, whose skill cannot of course be compared ,Yith that of the generntion of spinners which has gro,vn up in India, and, morcoYer, the China mills arc still in the stage of the discoyery of ,d1at may be term eel local economies in spinning, in which llirec tion it may be rc:marlrnd that much has been and is still being alc-om1Jlishccl. Still, however, there arn some 1Jrotu1 features in the spinningimlustrv of the two countries \Yhich render some rneasnre of com parison" possible, these may be conYcniently classell nnder the two heacliugs of" ml vantages" and "llisaclvantagcs." China's grmit advantage lies in her possession of a most excel lent quality of cotton, superior in staple to most Imlian cottons, much whiter in eolonr, aucl nnwh cleaner; as a consequence the cotton spins with less waste, and produces a urneh brighter and dminer yarn than does the Indian cotton. This superiority is sh0\n1 in the better prices which the China yarn commands, its rnlue being, count for count, some 4 to 5 taels per bale higher t.lmn that of Imlian spinnings, or say 6 to 7 per cent. Cheaper er.al is another factor in China's favonr; the figures that I have of certain Indian mills show their cost of coal per spimlle to be 0 taels per annum, against the Shanghai cost of OG 1 taels, a difference in China's favour of say 27! per cent, As the coal lJiil in spiuning forms some 20 per cent. of the tota] charges, the advantage lo China nnder this heading is some 5 to G per cent. Generally speaking, the climate of Shaughai is better suited to spinning than is the Indian climate. In many parts of India it is necei:sary to use humidifiers in the mills to keep the air moist; in Shanghai humidifiers are, so far as I am aware, un known, the natural moisture in the atmosphere Leing fully sn ltieien t. The chief disadrnntage suffered by Cl1ina as cornparell with India is the cost oi hbour. -It is difficult to say what is the exte11t of this disadvantage, as the price of labour iu India varies :;iccording to locality; tl1e figures of the Tmlian mills in my possession relate only to mills. in Southern India, where labour is cheaper than in llomLay, and wo1k out at 1 taels per spindle pe1: annum ; in Bombay the fignre is probably nearer 2UO taels. In Shanghai the cost of labour is some 2 taels per spindle per amrnm, a difference of 27 per cent. on the figure of the Sontheru India mills, aud 12~per ceiit. dearer than .Born Lay; averaging these two figures giYes a: cost of labour against Shnughai of some 20 per cent., and a~ the wages bill forms about 40 per cent. of the' total spinning charges, Shaughai'r, dirnllvalltage iu the matter of lal:our ,rnuld appear to be about 8 rer cenf. It should be 1wted,

PAGE 23

CIIIXA, however, that, with more experienced ,rnrking, the nurnLer of hands employed in the Shanghai mills is being gradually reduced, and it seems reasonable to expect that only time is required to bring onr labom cost clown to that of Born bay. Another serious disadvantage from which China suffers lies in the conditions of the local cotton market, which is practically in the hands of an unscrupulous set of coLlon growers and dealers, who are able to manipulate it almost at will, and who seem bent on killing the imlustry which is the main support of their trade_ The ouly way in which the demands of the cotton bongs can be kept in any degree of. check is by import.ing Indian cotton against them, and this the mills are compelled to do to a very large extent, thus diverting the work of the mills from the purposes for which they were started to the extent of such importation, and, moreover, lowering the quality of the yarns produced. And he)-ond this question of market is the great trouble caused by the iuiquitous practice of adulterating the cotton with water, a fraud which, though easily detected, d:tmages the cotton to an extent which cannot be compensated for by any cut that mn.y be made in price; judging from the natnre of the Chinese, it does not seem that this trouble can be overcome nntil foreigners are able to haYe their own packing station in the cotton districts.

PAGE 24

CIIIXA. III.-E.,;ports of Jier:hancli8c. The total market value* of China's exports to foreign countries teain Iilatm,s Cowens a ,cl reruse l'iece.goJJs, i:;ongee,, &c ..• Tea. ]faw cotton 1Jcnn cake Hides •• Skin~ •• Benns •• l':trnwbrnid )Ints und matting S11g;1r •• Total Ynluc. Currency. j Sterling. I lfoikuun tuels. .• I ::1 .. , i •• ! •• 1 .. ; 24,fi60,84D 21,807,230 3,659,203 10,838,338 60,\:!lfi,620 3,033,167 3,225,4-14 451,257 1,610,566 8,920,434 2,i'3S,355 Oil (bcun, groundnut, teu and wood) l'11pe1• •• .. j lS,512,826 4,.03,606 1,,704,,68,t 4,52t,701 4,0Z6,698 3,866,035 3,590,784 3,4f>7,IGO 3,014,210 2,796,fiS!:I le' ,fi6(i,fi44 2,150,141 Toua.cco "\Vool .. C,i,mcl's Wcol •• Hk. taeh. 1,60:l, 130 : 196,2[)9 : 1,805,429 The silver values have not been converteLl, in order to show the gradual progress of the export trade, as, expressed in sterling, Lhc real growth does not become so apparent. The following figures illustrate the devdopmcnt wl1ich bas taken plac,~ in the value of exports since 1801 :18!)1 18!)2 18!)3 18fl4 189.:'i 189{) 1897 18[18 lt;(.19 HJOO 1901 Year. 1 ! Value. Currency.t Sterling.! i-----~.------1 lfaikunn t11els. ! , • , IOO,!l47,84'l I 24,816,346 •• , 102,5t13,!;25 , 22,3s3,2s8 116,632,311 22,961,!)86 128,104,522 20,483,379 , , I 143,293,211 23,4:J4,4Ll .. ! 131,0.:H,421 2L,84Ci,903 163,501,358 24,354,889 159,037,14n 22,9-H,422 195,78!,832 29,4fl9,fi96 l 58,996,752 2 i,667,621 , • 1 lu!l,656,757 25,0U5,062 * 1'ide note, Tublc a, pp. 4. and 5. t Exprc.sed in silver. ! Expressed in gold.

PAGE 25

Clll'.'i'.A, These fignrc3, co:n lJ iue.J with Lhe q uantit.ati ve statistic:-; furnished in TaLle E ( 1 ), affunl some indication of how luw ,exchange ha~ had the effect of stimulating exports from this ,country, and of what u:ie m:,y exp3ct in the future. It has bce11 asserted that hacl it not lieen for the fall in silver a great mauy .articles now appearing in the export list wonlicees 1G,43D,546 3?,032,498 33,334,410 3Ianing Rolls 238,050 514,086 495,38.J. 2\fosk Catties 2,587 1,941 1,887 Nut l(alls Piculs 38,933 36,177 35,31S3 10il (bean, groundnut, . teu, woocl, &:r.) 44,,589 241,762 343,434, Oils, essentiul .. 2,175 3,028 3,160 Rbubnrb 3,771 7,!)7,1 5,501 Srsomum seeJ .• " 172,500 29i,3G5 Skins Value, tucls .. 881,225 3,791,049 4,026,698 .Strow brn.id l'icub 72,212 ~9,526 94-,075 Tullow, Yegeto.blc 23,490 111,312 Tobaceo .• 93,838 17:J,987 158,383 varnish ... 6,5ll5 6,571 \\"ax, while 5,i37 I 4, 17 '\Yool 133,363 2,i2,152 134,471 can1el's .• 39,878 14,22:1,

PAGE 26

18f2 1893 189 1695 1896 1697 1808 JSDO moo rno1 Ycnr. Tnule E (:2).-EXPOilT of Silk during the Y cars 18!}~-1901. 68,052 12,3'1;'.; 13,',i,!) 68,926 I 9,93 l 16,241 56,258 11,365 15.()J:J 38,22:i G,775 lll,3i0 48,468 7,f,10 19,0JG • 43,533 1G,45H 50,s~;; 1 I,14G 31,7(),; 11,267 lS,8,7 4,344* 27,0H 41,485 41,o:o 4\),-133 35,277 Cocoons, l'icnls. ll,539 O,G35 H,G3l 24,030 17,845 20,145 fl,058 n,1;;0 8Ji85 Quantity. Ilefusc, Cocoons. 0,18(3 9,520 ll,7~0 Refuse. 5G,80l G7,m; i:li,744 58,3W 71,33[) 60,lS:.l Gu,OH PicccG-oods. Shantm:g Pongee::. ----------l,iouls. l.3,111 Piruk 2,751 H,,G~l . 2,52i 10,35i,C 2,11s 20,501-\ -'.": 2,612 w••' 18,260 ,::,.2,590 18,438 17,5!J7 JS,G70 1 ;;,s 1.:1, li,958 Products, Total. Vnrious. J'ieuls. Piculs. l,584 18l,OG3 1,no 180,201 3,o,w 1!18,581 8 :::: 1,1)33 216,lRO '.,-; ?' 5,545 167,586 5,432 230,123 1,887 219,950 1,034 281,204, I,i82 19fl,2Gl 2,3Gl 238,G!H , ...

PAGE 27

Cllll\'J\. 27 Table E (2).-EXPORT of Tea llming the Years 1892-1901continuml. I Quantity. Ye~r. i-----------------------------. Hinck. Green . Dmt. Brick. Tablet. Toln!. !----------------------. l'iculs. Picule . Picnh-. Piculs. l'iculs. Piculs. 1802 1,101,229 lSS,440 855 323.112 !l,M5 1,622,GS L 1893 l,l!J0,206 236,237 l ,27:3 3s2;sa1 10,751 1,820,S:1 L 1894 l,217,2L5 233,4G5 3,173 395,5CG 12,()53 l,8G2,3 L2 1805 1, [23,952 24,1,202 3:W 481,3!)2 15,814 l ,865,GSJ 18!)6 ()12,417 21G,9~0 ~92 5GG,8B9 lG,22'1-1,712/HL 1897 7GJ)Jl5 201,1GB 1,(i28 558,203 fi,1.4:J 1,532,15, 18!)8 Mi,133 185,30G (jl!) ,198,425 7,117 1,538,G)) 189() !)35,578 213;793 l,288 474,026 (i,105 1,630,79 i 1900 8G3,37'1 200,425 :3i5 :=11G,D28 3,0~7 1,384,32-t lDOl GG5,499 1.59,430 9i2 29;;_:,22 8,570 1,157,!JJJ Table E (:1).--Co~rPARATIVE Table of Silver Prices* of snrnlr-, staple, of Export, showing l'erccmLage of Hise ancl Fall lluring the la:;t decad0. l'ricc per Picnl. Arli('leS. Ri,e or Fall. 1891. lDOl. -------------. ------. --------Haik11nn tnck Hnikunn tnels. : ,Per cent.. Aniseecl, st.:u .• J2 OO 22 OJ I + !)3 Deans., 1 1 + 52 Bristles 21 45 oo + 108 Cassia •• 5 10"60 + 112 Cott.on, 1'"-W 10 lGOO + 43 II<>mp •• 5 -l'.) 7 + 41 1 Vidc:-• , !)G7 19 + 100 :'II:t'. liug 3 co 4 : + 20 Nut !;alls D:! 2L + 133 OiJs, lH~nn, wood, ten., &e. "i GG7 8 + 46 Hhub:nb 3GUO Hl 45 Se~rnnum ~cccl I 3 rn 4 ;, + 36 .. , Silk-White 2~7 OO :378 00 + 47 YellolV :!O;) O) 2:30) + ,10 St ra Ii" b!-,1 i,1 :W:!S 33 i 7 + 88 Tc.i-Black !:0 Ji l(I 18 Gr ... ~rn 17) 2:_l + :37 o Dust ,f. GO 3GJ 33-3 ili'ek 7 00 8 'il) + 24 Tab I Pt. 21. ;,o rn,w 23 'fobnc(o. ll L 15 + 16 Vfoo! -8 . 12 OO + 46 0 '~ V:,lucs bk•:n fr;>:u Cmtom,' rctul'ns, giYing approxima.lc avernge for thewhoic Ernpi:c. A compn1iso11 of tl:c principal :nticles of 1 r0Jnc0, raw an1l. ma:mf,t~tnretl, c:xpcTtecl from lu 11a, with those exported fro11_1

PAGE 28

C:lll~A. China, di~closes a certain :-;imilal'ity in kind, but a very wide divergence in quantity and value. The Indian list is as follows:Rice, hides, jute, cotton, tea, opinm, seeds, cotton yarn, indigo, coffee, wool, lac, teak, silk, fodder, oils, coal, manures, provisions and wheat. Their total value for 1900-01 was 69,470,886/., aK -co111pared with China's exports value, :!>;-,801,G60l. The area of India is 1,700,000 square miles; populatiou, 287,000,000. That of China proper, including the Manchurian provinces, is 1,894,953 square miles; population, 367,000,000. In general it may be said that the standard of wealth in China is higher than in India, and one may add that, taking the people as a whole, a morn exalted plane of civilisation bas been reacheLl in the former country. It would appear to follow that the Chinese, lJeing richer, their internal trade is larger, and that they are thus in a position to consume more of their own produce, leaving a smaller proportion available for export. The Indian system of .administration mornover has, by fostering trade, removing intenrnl taxation and opening up meam of inigaLion and inter-cournrnnica tion, greatly increaseLl the producing capacity of the area nnder its control, and a considerable pe1iod of time mnst elapse before one can hope to see the like inl-1 uenccs achieving similar resu.lts in China. One very serious factor-in acltlition to those enumerated in Section I-militating against the extension of trade in sundry exports in China is the suicidal policy of the native seller, who imagines that it pays him to false-pack his goods.* This, co111-lbined with the keen competition, created by the increasing number ,of foreign buyers anxious to outain a share in the limited export ,trade of the country, has led to serious deterioration in the quality of the produce offered for export, with the natural result that the llenrn.ncl from abroad is thereby restricted. For the first evil the remedy is entirely in the hands of the Chinese themselves. The Government or the traLle guilds must realise that a continnance of this practice will inevitably kill what trade there is in certain staples of export, and it is incum :bent on them to devise laws or regulations to meet the situation. 'That this ia by no means impossible is proved Ly the fact that, ,when called upon to do so, the locu.l authorities in Sh'.rnghai were .able to cope successfully with the serious malpractices in ci::mnee tion with t-he supply of raw cotton to the local mills. ~! A cure for the secornt evil would be the exercise of commo11 .sense on the part of the foreign merchant. America, Australia, aad more especially Indifl, compete with China in the matter of exports, but in comparison with these countrie:o the export trade .of the Middle Kingd@1 has been not inaptly desc:ribeLl as a" sample .business." The Uhinese middleman is, as a rule, crassly ignorant of the conditions governing the world's markets, uut when he sees a)rnmber of Europeans fiercely struggling to outa:n a share of tile ,i; Stnnclnrd "chops" of raw silk constil utc an c~ception. The quality lhctrof i~, as n rnle, very well me.intninecl.

PAGE 29

C'IIIC',\. liLLle he has got to sell,
PAGE 30

~10 CIJIXA . . an elasticity of fiure which \\as 11ot obtaiuaule in silk reeled from the cleacl cocoon, arnl the silk thus prepared occupied a unique position in foreign nrnrkel s in spite of its com-.senes,; and occasion;il mwYenness. Fears Jrn,,e ue0n cxprc~sctl that, hy .adopting the steam filatmc process, ( 'hi1rn is ,irtually abamloning her monopoly, an
PAGE 31

CHINA. 31 :grown: on the southern faces of the hillslopcs in Lhe Manchurian province of }'rngt'icn. A certain proportion is spun locally, bi1t the major q nantiLy of the wild cocoons are exported to Shantung, ,;.here they arc spun in so-called steam tiiatures, and produce a much higher class silk. The former, known as ordinary tussrrh, fetches 200 tacls per picul, whereas the value of Uhefoo tnssah filatnres is 260 to :no taels per picul. It will be noted that the export of silk piece-goods does not advance, and considering the fine quality of the Chinese stuff this seems remarkttble. Competition on the part of Japan, which dispL1ys a greater readiness to meet European tnste, and un -cvc1mess in weaving are said to be the principal causes of this stagnation. Of the total export of raw silk Europe al1:,orbs 68 per cent., of wl1ich about 10 per cent. goes to the United Kingdom, the United States 23 p~r cent., and Indian and Eastem ports 9 per cent. The average total export from J ap'.m-principally steam filatures ~during the last three seasons has been 62,127 piculs, of which -00 per cent. has bee11 shipped to the United States. In the matter of taxation ,Tapai1ese silk enjoys an nd vantage over Chinese silk, in that it is free from all internal dues ,vhatsoever-t1rn .only charge levied thereon being an export duty. ,Vere the Chinese Covernment courageous enough to abandon their revenue from inlau!l charges on silk, they might find themselves rewarded l 1y the duties levied on an increased export trnrle. Bnt as inland -charges amount to 200 per cent. more than the dues theoretically leviable uncler treaty the adoption of so enlightened a policy is nnl ikely. The import of tea into the United Kingdom rose from l::i4,~67,3:l3 lbs. i 11 1871 to 286,000,000 lbs. in 1901. 90 per cent . . of the import of 1871 came from China, whereas towards the import of lDOl she only contributed 6 per cent. Taking the world's consumption as a whole, the supply furnished by -China has fallen from 86 per cent. in rnn to 2!) per ceut. in 1001. Extension of production elsewhere, notably in India and Ceylon, .short-sightecl fiscal policy of the Chinese authorities, and reluctance m1 the part of J1ati ve growers to abaiidon old methods and adopt new ones in place thereof, are the main reasons for this very remarkable decline. \Vhile China could not hope to retain for ever her erstwhile monopoly, there would appear to have been no necessity to play in to the hands of her ri vCT.ls. ,Vhen the first note. of warning was sounded in 1887, optimists Considered that the position of China's teas in the wol'lcl's markets was unassailable, and thaL the superior flavour thereof alone would suffice to safegna1:cl them [l.gainst the effects -of outside competition. Nothing was therefore done to reduce taxation or to introduce inmrovements, with the result that" the worst fears of the so-called pessiniists ha,c been more than realised. India and Ceylon lrnvc dri ,en Chi 11ese teas out of the

PAGE 32

CIIJXA. Lomlon market, awl are gr,lllnally lmt surely replur;ing them in Russia and on the Continent of Europe. To effoct a l'hange in the public taste necessarily takes time, but seeing how completely the British pnblir ha\'e abandonell the lighter and fi11l~ ilarnured Chinese teas, in favour of the more pnngem lenf of [mlia and Ceylon, one is justified in assuming that the same thing will happen elsewhere. Competent jmlges are of opinion t.liat, in the matter of Chinese tea, the highest point of Hussian import has heen toncl12ll, aml even to Hussia the export l'rom ('bina w.1c:. 7,750,000 lbs. less in 1901 than in 18U9. The export to the -United ~tates, where the demaml is principally for green teas, may be said to remain stationary, yet there too, India aml Ceylon are making every effort tb gain a footing. Hitherto, ,Japan has been China's only rival in the American market, an
PAGE 33

CIIl'.\A. Experts are convinccLl that, under proper treatment, Chinese lcu.E' would yield good results aml recover lost ground. The clilficnlt) is to induce the gro,rnrs to aLlopt such methods of treatmeut. Some six years ago an attempt, which ended in failure, was made to intrncluce machinerv in one of the li'ukien districts. Tliis di8conraging result ,rn; ascribed, not so much to any inherent defects in the princ:plc imoheLl, as to a lack of favourable conditions for carrying out the experiment. No efforts of ibis kind are likely to be crowned with success, until Europeans are in a position to procnre their leaf at approximately producing prices, and that over an area small enough to enable such leaf to undergo the initial stages of preparation within a short time of plucking. It is ouly by secnring the cordial support of the G,Jvernment that this object can be attained, but, from what one knows ol' official methods in this country, there is small prospect of any steps ~il the desired direction being taken. Of China's total export of tea last year, 18,000,000 lbs. went to the Unitetl Kingdom, 24:,600,000 lbs. to the United States, and 51,744:,633 lbs. to Russia, Yifl the Black Sea and Siberia, while Russian l\Ianchmia absorbed 27,361,460 lbs., of which doubtless a large proporti011 eventually found its way to Russia proper. In the Consular reports on the trade of Hunkow, Kiukiang, Ningpo, Shan~hai, Fouchmv and Cauton, the ports whence tea is shipped, will he found detailed particulars of the business done there duriug last season. A noteworthy feature of recent years has been the increasing import of Ceylon tea dust, for purposes of lllixing with Chinese dust and fannings made into tablet and brick tea, destined for the Hussian 111arket. The import last year amounted to 2,179,744: lbs. Some 27;J,280 lbs. of Ceylon leaf were also imported, but the experiment of blending it with China leaf has not prove,l very successful. Turning now to the minor staples of export, one finds at thP-Ila" cotton,. head of the list mw eutton. Tliis article gues almost exclusively tu Ja pan to feed the cotton mills there, Japan producing but little cotton of her own. Bean cake, beans allll bean oil, the products of Manchuria, arc Ilco.n Other articles the foreio-n ex11ort of which is so far practically conproduet;;. ' t, . ' ' fined to ;r a pan. There is and has been a large export of bean cairn from N ewclnurng to supply the needs of the sugar plantations in Southern China, but the growth of the demand from J apa11 may be said to have commenced at the close of the Chino-J apancse war, and Wits the outcome of observations made by the J apane$c during their temporary occupation 01 the Liaotung peninsula. Beans constitute au important article of food amongst the Japanese, and bean cake is replacing fish manure, which of late has become scarce owing to the Llearth of herrings along the ,Tapanese coast. A certain proportion of bean cake is distributed by Hong-Kong whence it is Hhipped to ,Jam. Given greater facilities for transport from the interior to the coast, cheapened production by introducing steam in place of native methods for crushing the beans, and (179) C

PAGE 34

8Cl!J);A. reasona lile ocean freighLs, there WlllllLl seem to lie 110 re1son why it slwuhl 11ot fi ml aclLlitional <,ntsiLle markets. His .Majesty's Consul a~ )[ ewchuang estimav2s that the total prmlnction of beans in J\Ianelnnfa is 600,000 tons per annnm, aml those interested cannot do Letter than consult his valuable book Lleali11g with Manchmia, its trmle mid its pr0
PAGE 35

CHIXA. :JJ ~:,;;pol't since 1897. This falling-off was entirely clue to the tlis ltnnesty of native manufacturers, who, by various method;; of deception, such as "short-i;ticks" and "stretching," cheated the foreign buyer. In coni;equencc plaiting was started in .Japan, where, as the result of intelligent technical instrnetion and of taking pains, an article is turned out, which is more regut1r i11 make and quality than Cliinesc braid, and which natmally is pre ferred abroad. Japan's export has more than doubled since 189, but were the Chinese to revert to the p1ths of honesty the rlemarnl wouhl not be slow in reviving. The export of mats and matting appears to be growing stea1lily, ,dthongh in 1901 there was a falling-of( as compare1l with one or two previous years. The export of sugar is confined to the southern ports of Canton, Swatow, and the Island of Hainan, whence it is exported to HongKong and from there reshipped to China, where, in its aGsmnecl capacity of a foreign import, it can claim tmnsit pass privil,!ges. Tobacco and rhubarb are both promising strtples of export which have suffered through lack of care in preparation. And the same may be said of feathers and bristles, the supply of which is abundant. Sesamun seed made a large advance last year, hut it has to be Se.,11,U1nm l iorne in miml that the export of this article from India is affected seed. l >y the same climatic influenceB as the export of wheat, and a bacl year for the latter means an equally bad year for the former. Shortage in the Indian supplies may J-.lierefore account for the increai:;e of China's export:-The following is the reply sent to a commi.mication from the Wool. United .Kingdom, asking for certain particulars with regard to the export of wool from China. "The statement that the export of ,rnol from China has had ,Ul extraordinar.v development of late years can hardly be said to he accurate. whereas the assertion that the bnlk of the wool exporte
PAGE 36

36 CIIIKA. "EXPORT of Sheep's wool from China during the Years 1892-1901. 1892 1893 1894 1895 1896 1897 1898 1899 1900-' 1 Yc11r. Total _1\xcrnge export •. Quantity. 'l'otnl Exports. 'l'o Unitccl State~. Pieuls. Picuis. 127,GO:l 119,219 91,410 78,534 211,996 191,886 197,439 179,470 145,119 128 551 204,197 187'.243" L 10,423 101,089" • • 195,1,91 183,191 •• , 96,674 ! 77,93 t •• ! 12-1, 78G I 113,913 1---------.. 1 1,505,140 I 1,361,027 1 , Per cent. 90 * Of the balnnce (2,500,000 lbs.), 967,150 lbs. w~nt to the United Kingdom." The writer goes on to say: "that Lhe Americans ha.ve an. , advantage over us in the matter of freight, equivalent to -3s. 8d .. .,. ,, \. per lb. The quantity of wool pressed into 40 cubic feet, for ship~ \ ::i (: ; . : : ment, varies somewhat, but if 2,000 lbs. of sheep's wool be taken, , , t as an approximation it will be found not to be far wrong. 1,_,'< "Rates of freight to New York via Suez have ranged during_ the past 18 months between ll. 5s. and ll. IOs. per ton of 40 culJic feet, while the 'conference' rate to London ha:; been constant at 2l. 5s. Therefore the extreme differencP. in fa,our of New York is ll. per 2,000 lbs., or not quite }cl. per lb. "On the other band, wool imported into the United States,. has to pay a duty of 4 gold c. (1cl.) per lb., so that, as a matter of fact, the British importer can lay his wool down 1cl. per lb. cheaper than his American competitor. "The vexed question of the differential rates charged by the British shipping conference, to the detriment of British trade interests, has been more or less prominently before the public, ever since the conference was formed. But surely no one has attributed tliis action on the part of shipowners to suusidies or other assistance, granted to them by the United States Govern ment. "Mr ..... is of opinion that there will be a far larger export of ,vool from China than there is from I udia. "The latter country, according to the Board of Trade returns, exported to the United Kingdom alone 30,730,361 lbs. in 1900. The average annual export from China during the last 10 years was 20,068,533 lbs., and experts differ as to whether or not these figures can he improved upon. One exporter, ,.vho points out that

PAGE 37

Clll:s'A. :J7 in 1898 there were in China no less than 4-:1. firms dealing in wool, struggling with each other for a share of 1 per cent. of the whole world's production of that commodity, contends that the limit of supply has been reached, as, were there more wool to be had, it would havn been brought clown to the ports long ere now. "Another exporter, who has been shipping to the United States for some years past, holds the view that a reduction of the import duty to 2 gokl c. per lb. would stimulate the export from China. He is, however, unable to cite any facts in support of this theory. Chinese wool is almost exclusively nseLl in carpet mannfacturing, .and it ioc: only when the price of Scotch wools becomes prnhibitive that there is a Llemaucl for it. The anxiety displayed by the foreign buyrr to fill hiG orders has leLl the native seller to mix with the \Yool large quantities of suncl, on which freight aml duty have to be paitl, as, were the wool cleaned prior to shipment from here, there would be very little left to ship." In addition to the staples of export, in which Europeun commerce is concerned, there appear in the cnstome' returns large quantities of native articles, shipped to the countries to which the stream of Chinese emigration flows, and provisions, vegetables and live-stock, for consumption in the European colonies, which fringe ;the coast of China. l Y.-Iniand Trade. with tlie exceptio11 of the trans-fronLier trade with Russia and (a) DisLribua negligiblP. quantity of commoLlities, interchangeLl across t.he ~ion of foreign western frontier of Burma, China's supplies of foreign merchandise imports . . are drawn, in the first instance, from three grnat maritime centres, Rangoon, Hong-Kong and Shanghai. It is difficult to say what the volume of the trade passing through Bhamo and Myitkina is, as only approximate statistics me to br. obtained. The aggregate estimated value for 1900-01 was 275,000!. When, however, the custom-house at T'cng-yii.eh, opened in the conrse of last year, shall be iu a position to furnish returns for a complete twelvemonth, fuller data, us regards the trade with South\Vestern China, will be available.

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38 CIII~,\. Tal,lo F (1 ).-TAULE showing Percentage of Foreign Imports distributed hy Hong-Kong arnl Shanghai (base1l un figure."' for 18f.l9). II01,g-Kong to Yiinn1111 .. Hainan ,, Pakhoi "\Vest Rivet Canton River delta Amoy Swntow •• 'l'ohil Shanghai loGnif of Pccl1ili ports Y nngt,z~t ports . , Shanghai nnd Soochow . , Ohekiung nnd Fukicn '.l'otn.l . , I .. I :: I :: I Perren t ngl'. 1 O O!) O!J 1 13 G 3 r. .. I 4!) ..1-20 __ _ '-------.. i .. ! .. ' I i •• I ! 2G :3 23 14 t G ------71 Tal1le F (2).-PEnCENTAGE of Imports, exclnsi\'e ceeding from the Treaty Ports into the Transit Pass (based on figures for 1899). of Opium, pro Interior unde1 To-Percentngc. -----------N orthcrn ports Yangtzn ,, aboye Hankow ,, ,, below and including Hn.nkow 0 7 52 Shanghai nncl Soochow Chekiang n.ncl Fnkicn Amov ,, Swat;iw Canton Ri,cr cle1ta ,vest. Tiinr Pnkl:oi .• lfui111111,, Yi.innn11 4 20 31 11 (1 5 35 18 3D 85 oo Of the total imports into Ohina, only 18 per cent. avail thernscl ves of transit pass privileges. Tlrn ordinary treaty port is visited only very occasionally by the large ocean liners, and the accompanying Table F (1) gives the proportion in which the two principal points of lrans-shipment distribute import cargoes along the coast. 1\s regardc; the despatch of goods into the interior from the port c,f entry, this can be effected in one of two ways. The owuer can either :;encl them inland, subject to any transit charges, leviable in the districts through which they pass, or he may, in terms of the Tientsin treaty, secure complete immunity from snch taxation hy paying the eq11iva1ent of an half import dnty.

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CIIIXA. 30 It has been clearly lai,l tlown that the treatment of Loth classes of goocls, on arrirnl at their destination, shall be alisolutely uon-cliJforential, terminal clues-if nny-sha,ll be the same for each. Table I<' (2) shows that, taking the Empire as a whole, half duty exemption certificates arc only applietl for in t,vo Cn"3CS out of ten, and one conclmles that it must lie more to the trader's advnntnge-pecuniary or otherwise-not to use transit passes, even through the n ltemati Ye course renders his goods liable to such ll.l'bitrnry e:rnctio11s, a'3 petty oftlcials in charge of likin or other lmrrien may see fit to inflict. Likin, now so uotorions that the ,vonl nppears in the latest standard E11glislt dictionaries, is a levy on goolls in transit, originally calculatetl aL the rate of one per mille, and instituted in the early fifties, for the purpose of defraying the cost of the T'ai p'ing rebelli,m. It is thus contemporaneous with and similar to the British Tncomc Tax. As regards both, clill the Governments concerned explain that the post was merely a temporary expedient, and give assurances that it would be withdrawn, as soon as circumstances permittetl. Hitherto, in neither country lt:i.Ye state~nnen seen their way to carry out this undertaking, but w hiln in the U nitad Kingllom there is small prospect, prior to tl1e ( lrcek Kalencls, of abandoning a tax on incomes, there is in Chinn. a growing feeling that, could other 1110:i.11s of raising an equirnlcnt rove1rnc be devisecl, likin should be done away with. The total amonnt it brings in to the Uovemmcnt coffers-Imperial anrl provincial-is said to be between 16,000,000 to 18,000,000 taels. The mode of collection, however, is so radically vicious, and affords so me.ny opportunities for harnssing trade that the majority of enlightened otficials are anxious to see it abolished. 'iVater-bornc goods being more easily checked and controlled than those travelling by htncl, t.he main strongholds of the likin collect!lrate are to be found along the great wat,erways of Central and Southern Chinn. In the north aml south-west, where merchandise is conveyed liy carts or pack mules, over mountain roads and for the most part through thinly populated tracts of country, likin is practi c:-1lly unknown. One "oulLl there[o1c infer that in Centrnl and Southern China, at leftst., the fullest arl vantage would be taken of the comparali,e iumumity conferred Ly tmnsit pass, but only 5 pet cent. of the imports iulo Shanghai and the Canton River delta, the centres of two Yery remarkable systems of water com m uni cation, avail themsei ms of this privilege. The explan::ttion of this stale of things is as follows:-The areas of distriLution are rich, the distance the goods haw to travel is not great, while the volume of the trade i3 very lnrge, and hence there is not the same urgent necessity, as in the case of poor2r provinces, to resort to extraordinary pressure for the purp::ise of raising provincial rcYenue. The likin stations are therefore in :i. position to c~iarge rates lower than the half duty of the transit pass.

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40 CHINA. It is willely assumed by Europeans that likin is levied on a fixed scale in ar.corclance with a published tariff. At the time ,when likin sLitions were tirst established, a scale of charge::1 may have Leen drawn up, lint little has ever Lc:en heard of it since. Ead1 !Joatmau er merchant, individually or through his guild, makes a private bargaiu with the collectors-on a mutually profital>le basis. He may pay either in money or in kind, and as long as he is open to compromise no undue friction arises. On arri vnl at his de'>tination nothing unreasonable in the w,iy of termi11al taxation is demamled from him, as he has playNl the g,une, acco1din6 to established mles, and is ! herefore entitled to consideration. The pestilent person, who takes ont a transit pass, however, is treated very differently. He in the first place pays his duty at the port of entry, whence it is all remitted to l,eking and thus los~ to the province. He is tenacious of imaginary rights, and on arrival at his destination makes inconvenient enquiries as to the non-cliffereutial nature of terminal taxes. If 110 be non-Chinese, the likin collectors resi!n1 thern sel ves to the iuevitalile, pass him through, and are glall if t'.hey hear a;iothing more of him. If on the other hand a Chinese has the temerity to elaim rights u_rnler treaty, he is accorded very different treatment. His boats are subject to undue delays, and he is generally harassed to snch an extent that he finds it desirable to abandon the use of the transit pass altogether, OL' if he be travelling in a region where trnnsit passes are more or less respected, to conciliate the collectors by paying unauthorised charges when asked to do so. Theoretically, of course, he can cla.im refund and amages, and the Consul would be only too ready to ser;ure redress -011 his behalf. That official, however, crmnot well take action unless some one makes a specific charge and supports it ,vith rdequate proof. ThiJ the native invariably declines to furnish, a:;, liy so doing he woulll set machinery in motion, which might eventually ruin him. He not mmaturally prefers to pay his lil,in, or any excess charge over atlll above bis half duty, that unty be ,called for, and pursue bis avocations in peace. In the country lying between allll surrounding the ports of Hankow and Chinkiaug, it is trne, trrmsit passes are taken out freely, but in most cases the good'l covered Ly them have long ,distances to travel, and the transit parn only safeguards them up to a certain point. Higher up the Yangtzu the authorities decline to recognise the validity of these docmmmts. Some yea'.'S ago the authorities of Knanghsi took upon them :sel ves to interfere with goods under transit pass, in the hands of a European, and after a long fight heavy damages were recovered from them. This is sufficient to account for the higl1 percentage of passes taken out along the ,V c:st River. That, in Yi.i.nnan almost a,11 imp:nts take out transit passes ,vould seem to contrallict the previous statement that likin barriers
PAGE 41

CIIINA. 41 ]had b~en drawn to the evils of likin taxation elsewhere, and the particular attention of importers was drawn to the advantages, which this, to them unknown, system would cc,nfer. They accordingly commenced by takiug out transit passes, and have -continued to do so ever ::;ince. It is open to q1!estion whether it would not he cheaper for their goods to pay as they went along, and it is prouaule tlrnt the use of transit passes is encouraged by the authorities; as the Central Go,ernment thus obtains more revenue from that province, than under other conditions it could -expect to recci vc. The great objection to the likin system lies, not so much in Likin system. the heavy incidence of present taxation as in the fact that there.under transit aml terminal charges on foreign goods can be indefinitely increased, and the free and speedy circulation thereof unwmTantahly hindered. To abolish it entirely in respect of nat.ive ~v, well as fol'eign goods, and to come to some arrangen1ent, whereby the resniting loss of revenue can be made good to the Chinese Government, is the only adequate remedy for these evils, and of late an attempt to deal with it on these lines has been made. It is, however, regrettable to fiml that, notwithstanding long-continuetl and oft-reiterated protests against li kin, as an iutolerable bun.Jen on tmde, certain sectious of the mercantile community are inclined to advocate the maintenance of the statns quo, with .all its inherent drawbitcks and defects, rather than to accord their support to a comprel:ensive scheme for grappling with an undoubtedly difficult proulem. The attitude assume1l savours of illogicality. A collective levy of 7! per cent. ml rnlorem on imports, . ,coupled with other ill-defined and wirying cbar~es as well as unknown J?Otentialities of delay, is either one which the trade can staucl or not. lf the former, why the loud previous outcry ? If the latter, why the persistent oppo'lition to salutary reform 111easnres ? Instead of goiug straight to the root of the matter, a com promise would appear to be desired, mid it has Leen prnposed to -commute all terminal tax,ttion by an additional compnli:iory pay ni.ent of 2! per cent. on all goorls going beyond the treaty port area. If the present working of the transit pass system has been explained at all clearly, it must be ohvious the,t the carrying out -of such a proposal, means simply the gratuitous gift to the Chinese .authorities-whether Imperial or provincial-of whate,er sum such a sartax: wonlLl reulise. That it wonlcl be pm:sible to ensure its collection on all merchandise uf the kind indicated is very improba~le, and, we:re China to grant concessions in co11sideration ,of such raising of the cluty, the 1argain wonlcl not he greatly in her favour. \Vhat guarantee, on the other hand, would the European merchant have that his goods, haviug paid the surtax, would rearh their furthest destination free of additional charges? As in the case of transit passes at present, the native trader will Ji11d it to his interest to conciliate those in authority, by paying what was askecl from him. He would continue to refrain from

PAGE 42

CIII?\A, coming forward to make open complaint, a,ll(l those concenwd. unable to prove that an infraction of treaty had taken pLHT. wonlLl have to acknowledge in the end that their well mem1t efforts hr.cl resulted in nothing but an increase of initial taxatio11. The unwillingness of the mercantile community to support schemes, aiming at complete likin abolition, is largely chm to nn apprehension that auy undertakings entered into \\'onhl be vitiated by lack of bona fidcs on the part of the Chi neEe Governmen l, aud that, in spite of all guarantees, inland taxation would go 011 as lJefore. They are therefore aYerse to committing tl1e1111:wlYes to a policy which may in their opinion lead to trade l1ei11~ lllOl'I.! heavily bnrdened than at present. To this the answer is that once all likin barriers arnl tax stations have been clone away with, it wil~ '.Je 110 easy matter tc• re-establish them, and freedom of eirculatinn, having been ]>11 Llicly announced, the Chinese trade;, feeling himself assured of support, will 11ot be deterred, as at present, from corning forward to make complaint should he fincl any of his privileges abrogated. Differential taxation having ceased to exist, he could uot be arbitrarily called upon to pay unauthorised charges, and cheek arnl control on the part of foreign officials would be greatly focilitated. Even in the event of things not working smoothly in the begin ning, it can be taken for grnnted that pressure will not Le relaxe1.1 until complete sati:,faction is obtained. . That a large number of officials-great and small-connected with the likin collectorate would be thrown ont of employment and create trouble has ahvays seemed to Europeaus a formidable obstacle in the ,,,,-ay of reform. when one knows that China's statesmen, who, it is to be presumed, have a fuller grasp of the situation, atlach no importance whatsoever to this argument, one may be content to accept their Yiew. (b) Collection As in the case of foreign imports, inhmd clues, while en route of nuti"l'e produce for to the port oE export, can in the case of natirn produce for ,hipmcnt shipment abroad, be commuted by a payment of half the tariff ,d,road. export duty. An.cl under certain conditions nati ,e prml11er, not neeessarily destined for shipment to a foreign country, may claim similar treatment. The customs returns of transit trade, making no distinction between the two classes of goods, it is not possible to compile a. table, showing the proportion of produce for export Lrought down to each port under transit pass, but a'3 only 7 per ceut. of the total exports in 1901 availed themselves of this pri vil~ge, the absence of such a table is matter of no great. moment. The incidence of internal taxation on native prmlnl:e i:, by no means light, ancl those who object to an increase of clnty on imports, in return for an abolition of likin barriers, leave out of account the effect snch a measure would have in stimulating exports. The elementary economic axiom that imports can 011ly be paicl for in exports seems to have been entirely overlooked, aml as it has been demonstrated that internal taxation killed the tea trade,

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C[J]:::SA. 4"' ,)• is t l1rcate11iug silk, aml serionsly affe,.ting other staples of c:-.:pmt,. this short-sighted policy is 1trnclt to l,e regretted. At present produce for export is collected in the interior liy native agents of the exporting Jinns on the cm1st, bnt this system not haYing been found entirely s,itisfactory, certain foreign merchants wish to secme the right ()f uurestricteLl inland rnsidence, for purposes of trade. Jnlancl residence, ou the part of mi!= question if the resulting adnrntuges ,rnulLl compensate for au e:-.:i,ension of this hostile attitnclc to the mercantile cmnrntrnity. Hy judiciously setting to m,rk c#1 the lines of Arlicle \' f, Section ::1, of tlic Sllimouo;.;pki nealy, the foreign mPrchant, a11xious to devel,ip his export Lrncfo, ought to lrnn.: no dillicnlt.1 in so cluing, aml this with depC,t::; at in laud steam navigation stages ought to snilice for all his 1eql1il'ern0Hts. The extension of rnil\Ya}S and mining enterprise ,,ill abo .~rarlually bring abo11t changes, which it wouhl l,,! n~1-y 111mise to try aml Jorce on prematurely. As the Imperial l\faritime Cnstorns has hitherto had uncler (,-). Tnt,rnnl its supervision only such portion of the internal trade as is cnrriecl nati,e tt-.icl,,. on between the trcnty ports ot' < 'hina in \'C'sscls of foreign type, the statistics pnbli,.d1etl cnmwt, e\'en approximately, furnish an iclea of the value oJ' the i11 tcnrnl trade c,f the eountry. "When effl'ct sli:111 lmYe been given tn the stipulation of the final protocol o( HlOJ, that gooth carrictl in 11ati\'e Yessels shall, at the treaty ports, pass under the control of the l\fori tin1e Cm,toms, one may be in a position to gauge more, accnrately the Yolume of trade, moving coastwise aml along the main inland wnterways. Uut some time must elapse before a complete tmnsfer can take place,. and in the meantime the inurlerpiacy of their staff and latent opposition, on the part of those inlensletl, renders Lhe task of the Commissioners rt cliliicult one. As for as stramer-borne goods ani concernecl, tile tutal 11atirn imports at the open ports (natirn imports into one port lieing exports from another) Llaring IDOi amounted to 12,i,454,462 taels ( 18,556,SOGl.). The tignres fur 1SD9 ,,ere l ::2,aG!J,] 4'.l tac is, a foll ing-olT ia 1901 of 7,514,681 taeb, or ronglily 1,000,000!. An interesting fcatu re it: co11 nection with tliis in tern al trmh~ is the widespread practice of shipping produce from the southern ports of China to Lhe Dritish colony of Hong--Ko11g, whence they are exported and re-imp01-ted inLo China as goods of foreign origin, lwing entered as snrh in the customs' retums. This is done in order that, on return to China, they may, as ituasi foreign goods, secure the privileges of a transit pass. That a merchant finds it to his aclYantage to pay a 5 p0r cent. export duty, freight to Hong-Kong ancl back, an import clnty of 5 per cent., ancl a transit duty of 2} per cent. on hi:; produce, for clis tributi011, in many instances, in the ,ery prnviuce in which it was grnwn, is a striking illustration ol' the heavy incidence of internal

PAGE 44

44: CIII:N A. taxation. Two of the princip:11 articles thus exported are tobacco .and paper. Another anomaly of taxation is that goorls, of native origin -carried coastwise, are subject to what is known as a coast trade tbty, ,yhich consists of an export duty of 5 per cent. at port ,of shipment aml au import duty of 2t per cont. at port or entry, and are thus more heavily taxed than those imported from abroad. Chinese sugar and coal, for instrrnce, moving from one port. to another along the coast, have to pay duty at the rate ol' 7} per cent. ad valorcm, whereas the same commodities, coming from Hong-Kong or Japan, P\Y at the rate of 5 per cent. only. The princip::tl articles circulating between the ports, ar,, food stuffs, native cloth, silk piece-goods, oils, seeds, sugar, chinaware, beau cake, liquid indigo, gronmlnuts, mats and matting, rush hats, gunny bag,s, and the hundred and oue items ,vhich figure in the . Chinese pharmacopceia. "\Villi tile exception of an exchange of the ]Jean cake, gronncl nnts and rice of N ort!tcrn and Central China for the sugar cf the South, as a rule effected directly, the major portion of the interport trade centres in Shanghai and Hong-Kong, the point of contact of the _circumferences of their spheres of llistribution being Foochow. Table n, basell on the returns for 1899, those for the two bter years, as has been pointed out, not affording complete data, illustrates the share taken by each treaty port in the external and intenial trade of the country.

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CHIXA. Table G.-V,\LUE in Sterling"' of the whole Trade of each Treaty l'ort, under the cognisa11cc of the Imperial Maritime Customs. (based on the Hetnrns of] 899 and exclnsirn of Treasure). Net Imports. From Abrom! From Chine,e Ports. Net Exports (Loc.,l Origin). 'l'o F orei"n I To Chi neffi Cotmtrie~. / Ports. : ---------,------------------. Shanghai 5,823,600 2,213,740 G,830,000 3,825,COO 'I'icntsin., 5,892,000 3,393,600 1:32,685 2,222,700 Canton RiTcr clelta 6,307,050 4, l 31,704 8,!366 2~0 535,160 Cunton .. 2,083,50'.) 2,672,lCO 3,50,j,7W 535,lCO Kowloon 3,695,300 8il,5H :J.O;H,000 Lnppa 548,250 538,150 926,500 lfonkow 3,250,000 1,210,800 G00,[100 4,9~8,700 Ncwcbuang 3,266,500 899,600 1,303,800 l,7f8,'i50 Swatow., 2,055,000 2,593,9CO 61G,950 1,507,000 Chefoo 1,845,600 838,125 2!.J9,EOO l,2,t5,000 Chung king 2,461,'100 582,750 1,:125,000 Chinkiung 2,198,,rno 1,057,600 11 ~.rno l,Oi9,400 '\Vuhu .. l,0+1.900 409,200 l,ilO l,ii80,5C0 Kiukiung 1,188,750 287,750 1,358,20(} Foochow 1,020,250 308,70) Bii,000 397,200 Amoy .. l,'t90,8CO 6:)0,000 183,500 lS0,300 Ningpo .• .. i 1,381,275 11], 150 647,230, liungchow :: I 410,500 354,500 9G0,500 Wuchow 6H,700 13,800 276,900 13,230 llfengtzu :: i 50G,100 282,600 Kiungchow 365,000 2,415 I 321,EOO 8,!:i50 Pakhoi .• 366,600 5,325 3,500 12,00(} Ichang .. 238,500 222,500 !)5,100 Samdrni 348,450 11,51"0 71,100 14,730 West River stages 215,250 l,G51 13,950 4,501} Nanking 92,925 57,,150 209,250 Wcnchow 127,5(0 42,750 73,650 Soochow 54,0CO I 59,250 104,500 * Exchange: 3s. = l lILliknnn he!. It will be noted that the total rnluc of produce of local origin exported from the Canton l:ivcr delta to foreign countries is given as over 8,000,000!. That of course means that the lm lk thereof went to Hong-Kong, and was there tra11shippe
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C:!IlN,\. Kong is also tlw desti1;atio11 of Uw Chi11ki,111g direct exports, .alm,)st exch,sively grnnnclnuts, lotns seeds arnl ~ronnrlnnt oil. TVitl1 the exc~ption of a smnll amonnt of opiurn, Sl'nt into To11gking, the cntin! c:xport of Y11111•a11 consist;;; of tin in slabs-t!\e -outpnL of the Kuo-chin mines, ;;;itua.ted thn'L~ days a\\'ay from ::.\Iengtzu-aucl is shipped to Hong-Kong. The residue of the exports of the Northern and Central China ports is conveyed hy local stramer.s to Sl1anghai. The total value of such shipments in ISD!l ,ras 12,?.50,000/., of which G,,000l.-almost exactl;r the cquirnlent valne of the irntive prorlnce .of loc,11 (i.e., Slrnughoi) origin* exported-was sent abroad, 2,750,000/. being rcsen'ed for local use, and the remainder reshipped to other Chinese ports. Hong-Kong lJ,,iug a free port, it is i 111pussilile to obtain similar stat;istics as to the ultimate destination of the products of Sonthern Cl1i11a, which it distributes. The value of the total exports of 18!)9 wos about 29,000,000l. Shanghai, as stated above, sent abroad nearly 13,500,000l., the other ports expmtecl clirect some 5,000,000l. worth of produce, so tl1ctt Hong-Kon~ must be held accountable for the Lalance. A rough calculation would seem to show that the balr1,nce of imports ancl exports in the south is fairly eYenly maintained, aml that the disparity between the total import and export figures is .clue to Northern and Central China absorbing foreign goods of a valne greater than that of the native produce, which they dispose of in foreign markets. • lt is also difficult, except in a Ycry gem'1al way, to indicate the course uf interpo1t trade in native produce. The exchange of the bean products, groundnuts, grnundnnt ,tncl other oils of the north for the sugar of the south has already been alluded to. Ilice is expurted in large quantities from "\Vnhn and Ohinkiang to supplement short supplies in the Kuang1ung province. :Fooclww (a large lumber-exporting centre) aiH1 Kinkiang furnish the rest uf the Empire W\th pnper; Kinkiang, aml to a lesser exteut, Canton, with chi11aware. ::.\Iedicines and yellow silk are the principal exports of Ss(teh'uan ; bean products, straw hats, hemp, )VOocl oil, native umbrellas ancl lumber those of Ffankow. Tobacco, in so far as it is not locally grown, is imported from the 1\fanclmrian provinces, and the country of which Haukow is the exporting centre. In the same way deficiencies in the local supply of opium .are supplemented by imports from Ssuch'nan mid Yiinnan, vi,1, Ch'nngking, and overland through Hnnan and Kianghsi. The Kiangnan (Lower Yangtzu) 11rnrket is said to be entirely suppliCLl with Hsiichout opium, inferior in <1uality to Yfoman opium, but superior to that or Ss11ch'uan. It is only with regard to snch qum1tities as come under the cognisance of the Maritirne Customs at Ch'nngking that figures .are available. After having once paid the Maritime Customs duty, which, in the case of Ssi:'tch'nan opium, amounts to about 33 per * 5,500,000l. rcp1•esenting silk ancl its products. t Nort.Ji-,Vest Kiangeu,

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CIIIN ,\. -eent. rul calortlll, and in the case of Yiinnau opium 20 per cent. present the eonsumption between Ich'ang and tl1e Lower Yaugtzu, the Hi,000 piculs of the foreign custom-house going to maritime ports beyond Shanghai. Y.-8hi11ping. The total number of vessels entered and cleared in 1901 wa8 {i-1,8H, aggregating 48,416,668 tons. This inclnclet: 7,921 Chinese jnnks (:.345,170 tons), but not the native shipping of Kowloon or Lappa, nor that taken cognisance of by the custom-honses of ::\lengtzu (for Manhao on the Heel River), Chungking, Soochow, aml Hongchow. Leaving ont the junks, there remain 5G,923 Yes5e]s, ,071,498 tons, as against 3J,443 vessels, ;=\3,228,77:} tons, m1terecl and cleared in 1896, an increase in tomrnge of per cent. The nmnber of sailing vessels ha'l increased by 2/500, their tou nage l,y some 30,000 tons, but it is not possible to discover how much ,of this increase is due to an expansion of the junk traffic. Of the gross tonnage, inwards and outwards, the percentage coutribnted uy the British Hag in 1896 was 65 per cent.; German, (j per cent.; Swedish and Norwegian, 3 per cent.; French, 1 pbr -cent.; Japanese, 2 per cent. ; Chinese, 22 per cent. ; and all other tlags, 1 per cent. In 1901 the percentages wer-3 somewhat .differently distributed, the United Kingdom and China's per centage fell to 5 and l~l per cent. respectively, whereas the per .centage of Germany rose to 16 per cent., that of Japan to 11 per ,cent., and that of France to 2 per cent. The Swedish and Nor-

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48 CIIIN.\. wegian nag \\W3 absorhcll in the l per cent. of other nags, its place being taken l,y the Cnited States with 2 per cent., and Russia with l per cent. That the percentage of British tonnage should have fallen off so considerably is due to the strenuous efforts made by Gernrnny and Jap,m to compete for a share of the canying tralle on the coast of China, to the increase in the size uf the mail steamers which German companies r.mploy on their ]Tar Eastern line, and to the Llevel1,pment of the ,Ta,panese steamship services. with the United St,ltes and Europe. As reganls the tonnage engaged in the cnnyin~ trade betweeu Chinn and foreign countries, the United Kingdom has remained stationary. E:'.\TEl:ED. Nnmhrr of ! V C5sels. Tons. I -----Imports. i Export~. Pcrccntnge carried. Ye.w. ---------1----------------------•• • • 2,GSG 1 3 239,891 I 64 45 lSDI> •• H)Jl .. . . • • 3,005 I 3,293,239 . 55 I 39 And in spite of an increase of entries to the extent of 2,1631,813,724 tons-in respect of coast trade her percentnge, 54 i11 1901, is only 0 abow that of 1896. It was not to be expected that we ,voukl be allowed to retain, for eYer om former supremacy in the matter of the carryiug trade but the opposition we now have to encounter is by 110 means to l,e despised, and should our percentage of the gross tounage go on dwindling, at the rate of the past five years, in 192G the British flag will represent only 4 per cent. of the whole. It is to be presume
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CHl:,iA. 49 scnsilJle one, aud one which ought to commcnLl itself. to everyone who has experieuced the annoyance and inconvenience of having to remain at a wayside port for a week or 10 days, until it suits the steamship company concerned to fetch him away. The ,Japanese also have the advantage over their competitors in that t.hey thoroughly understai!d the requirements of native passengers and have a lower wages bill. The natural desire of other Powers to foster trade, under their own flag, with tlieir recent tenitorial acquisitions in the China seas, has seriously curtailed the sphere of operations of British shipping. The cloor has practically been closed to us in Formosa and Vladivostok, aucl the inducements being offered to those shipping goods to and produce from Manchuria via Dalny may, at no very distant elate, have the effect of driving 150,000 tons of British shipping a1rny from Newclrnang. VI.-Inf(lnd Stmm Navigation. Owing to arhitrary restrictions in the provisional rules the privilege of navigating the inland waters of China has not hecn macle nsc of hy the European trader as extensively as might have been anticipate
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50 CIITNA. Hsiang-t'an. As t.he steamers can only run for 9 months of 12 the venture may not prove a financial success, but the spirit of enterprise is there, aml will make itself felt in more than one direction. Expert opinion would seem to have decided that steam naviga tion of the Yaugtzu rapids is impossible, and it would be well to concentrate attention on what might be done above the rapids, 'lll the comparatively clear stretch of water between Wan-hsien aml Hsii.-chun (Sui-fn). VII.-Eniigration. Hitherto Amoy has constituted the nmthern limit of the tracts of country whence coolies emigrate to America and the Southern Seas,* but last year a trial was made of shipping coolies from Foochow to Madagascar. It cannot have been very successful as it is reporterl that they have been sent hack to Foochow in tlw course of the present year, possibly owing to the outcry of rela tives, who received no remittanc0R. A fnrther consignment, all Roman Catholics, was llespatchcd to Reunion in September, arnl there is not likely to he trouble with them, as rouncl nhont Foochow t,he Homan Catholic religion bas h0en established for centuries, and the heads of the church will see that their prott;g0s receive fair treatment. North Borneo and Sarawak have also in dented for Foochow coolies, but for various reasons the initial friction of starting a new experiment has not yet been overcome. The same may be said of an attempt lo
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Import dutic~ .• Export ,, Coast trade duties Tonnage dues .. Transit duos-Inwards Outwards •• Opium likin-On foreign opium .. On native CHINA. Haikuan tael~. 715,537 201,595 -3,428~828 -, __ 541,703-1 Amount. Haiknon tuels. 8,556,700 fl,122,270 2,HH,380 80fJ,561 Dl7,la2 3,070,531 51 ______ j _______ -----Seeing the great disproportion between the volume of imports from aud exports to foreign countries, it may seem strange that the export duties should exceed the import duties. The explana tion is that the export lluties include a sum of 4,:396,673 taels export dues on native opium and produce for native consumption, carried from port to port, in vessels of which the Maritime Customs takes cognisance. Roughly four-fifths, 19,825,444 taels, of the revenue is deri vell from foreign aml one-fifth, 5,712,130 taels, from the home trade, towards which native opium contributed 1,942,000 taels. Since the drawing up in 1858, on a 5 per cent. basis, of the import tariff, the rise in the silver prices of imports gradually reduced the duties thereon t-0 something over 3 per cent., and the Powers in the Final Protocol, signed on September 7, 1901, ac cordingly agreed to a raising of the tariff on maritime imports to au effecti rn 5 per cent. This provision was not, however, put into force until N ovmnber 11, 1901, ,mcl has not appreciably affected the revenue retums o[ the year. China is at present engaged iu making every effort to have the import tariff still further increased, and to have Lhe export tariff recast, and it remains to be seen what terms :,he is prepared Lo offer in exchange. She is also trying to devise various new forms of taxation, such as house taxes and stamp duties, which, Lo judge by results ~o far, are certain to be extremely unpopular and not at all likely to prove productive. IX.-Mines ancl Rciilwa:ys. The internal economy of the Empire, not having fully re eovered in the course of the year under review from the grave shock it sustained in 1900, there is little to chronicle under this heading. The K'aip'ing Coal Mines were sold to a British syndicate, which is endeavouring effectively to llevelop its new prorerty. Little is heard of the quicksilver mine, quietly working in Kuci-

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52 CHlNA. chou, and the only mine which appears to have done well is that, whence the Han-yang Ironworks derive their ore at 1\t yeh in Hu-pei-60 miles below Hankow. Being a Chinese semi-official undertaking particulars regard ing it arc unobtainable, but the output must exceed requiremenLs, as 69,000 tons of ore were shipped in 1901 for the use of the Japanese Government foundry near Moji. The Japanese steamers, by which under special arrangement this ore is shipped, bring across coal for the use of the ironworks, but good coal having lJcen discovered near P'ing-hsiang, in Uhianghsi, a railway line is being built to bring it down to the Hsiang River, on which Hsiang T'au and Ch'ang sha lie, whence it can be taken to Han .. yang by boat across the Tung t'iug Lake. Part of this line is already open to traffic. vVork 011 the Lu-han line was, on the nort.liern section, con fined to repairing the damage llone by the Boxers, aml 011 the southern section was eaniell np to near t!te bonlers of Ho11a11, trnius running thrice a week from Hankow to Kuang-slrni, a distance of 96 miles. Ou the anniversary of the accession of the Emperor of Russia in November last, a little over 10 yearn from t!tc date of its com mencement, the Great Trans-Siberian Rail way stoou completed, and Vladivostok, Port Arthur and N ewchuang are now con nected by rail with Europe. A very great deal more, however, remains to be done before the railway can pose as an efficient passenger or goods carrier. The Shantung Railway, which is going to connect with the Tieutsin-Chinkiang line al; Uhi-na11, the capital of the province, and which has exclusive rights over the coal-fields of W ei-hsien, Po shan and Puts'un, was completed as far as Tso shan--90 miles from Tsingtao, or about a third of its total length. 1'he whole of the 1'o shan valley is said to he one vast bed of eoal, and in the immediate neighbourhood thereof are the iron ore deposits of T'ieh-shan and Chin-ling, the ore of which is supposed to contain an unusually high percentage of iron. The Indo-China-Yi'mnan line has uot made much progress, and owing to the small amount of water in the Heel River for many months of the year, it is difficult to see how material, in large quantities, can be laid down in China until Laolrny is in communication with the sea. As there is small likelihood of the Vietri-Laokay section of the 'l'ongking Railway ever being a financial success, and the engineering difficulties it entails are not to be despised, some years may elapse before it will be possible to begin work in earnest. There can be no boubt of the fact that China is beginning to realise how important it is for her to endeavour seriously to approach the problem of developing htlr mineral resources, and the tentative rules, published in the spring of this year, afford an indication that she is prepared to go farther than she has ever gone before . .A,s they stand these rules are somewhat impracticable, but

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UHlNA. with judicious revision, on apprnved models, they should serve their purpose. Nations are unfortunately not at one as to the principles of economics, which go to bui.ld up national wealth, and although, in the multitude of counsellors there may be wisdom, China may well be excuseLl if she pauses sornewlmt before committing herself. The case or Ja pan, which country finds itself compelled to rellludel iti; mining regttlatiuns, as they do not attract the indis pcusable foreign capital, may influence China, and lead her to aLlopt from begi1111iug, regulations with regard to mi.nes and rail ways, which will prove mutually profitable to all concerned. X.-Siigye8t,ions fo, Extension of Tmclc. After what has been stated in Section I of this report, it would seem superfluous to endeavom to indicate possible methodi; of cxtcmliug trade. In the hope, however, that the apprehensions, therein expressed, may prove to have been without foundation, and that the recuperative power of the country will once more assert itself, the following 1:,uggestious are i;n bmitted fur the cou sicleratiou of those iu terested. His Majesty\; representativei; in foreign countries have of late, wiLh siugular unauilllity, been urging that it would be of material u&,istance to the British merehan t were he to place himself in direct communication with his customers, Ly speaking to them in their own language. It is true that clai;i:;es for the study of Chinese Lave been instituted in the U nitecl Kingdom, which in comse of time will Lloubtless turn out gooLl Chinese scholars, who will at the same Lime prove capaLle men of business. But more might be done on the i:;pot. Principals should afford facilities for learning the language to young men, who are likely to interest themselves in the eonntry, and with regard to whose qualifications in other respects they have satii:;fied themselves. No firm can afford to maintain purely ornamental interpreters, and to ask anyone, with nu taste for languages nor any sympathy with Orientals, to devote his spare time to au uncongenial task, would be futile. Many youths, tu whom the study of Chinese offered no attrac tion in London, might, given proper encouragement, take it up out here, ai:; they would have constant opportunities of airing their newly acquired knowledge, and be thereby made to feel that it really could be put to some practical use. The difficulties of acquiring a working knowledge of colloquial Chinese have been exaggerated, and so much is now known of the way in which 1rntivc trade ,is canied on, that only, in very rare instances, need energy be misapplied by learning Cantonese, when it is proposed to station the buckling sinologue at Hankow. In addition to being able to converse, an acquaintance, up to a certain point, with the written language is essential.

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54 ClllNA. It speaks very highly indeed for the busiuess integrity of the Chinese, that almost all Emopcau banks and mercantile houses iu China coudnct their lmsiuess without having in their employment one single white man capable of checking in the slightest degree -be it even t.o the extent of reading simple numerals-documents submitted by native shroffi,, concerning transactions running into thousands of pounds. That this should have been possible in the past may be used ai:; an argument against the present proposition, but the conditions of trade in China are changing radically. It is therefore impera tive for the British merchant to adapt himi:;elf to this new state of things, and to place himself in a position efficiently to grapple with the problems of the future. The gradual opening up of the interior, too, to whid1 all look forward so anxiously, will necessitate the training of a staff of young men, who will ue able to protect their employers' iutere::;t in places, where English is not known, and ~vhere to trust to the average English speaking Chinese interpreter would, in nine cases out of ten, be disastrnns. It cannot be said that the advocacy of this policy is a farther ini:;tance of official dilettantism. It has been tried, and wherever tried has Leen crowned with cow,picuous suct.:ess. At leasL Lwu large British trading associations-entirely m1cumiected with the importation of munitions or vessels of war-have employed Chinese speaking agents to travel about the country, and to judge by the consequent extension of business, must have reason to coi1gratulate themselves on their pioneering enterprise. lt is not without significance that of late there has arisen so large a demand in mercantile circles for retired Consular officers, who, it is to be presumed, are engaged at a large premium, not so mud1 for their acquaintance with business af> for their knowledge of Chinese. IL stamls to reason that a know ledge of the language implies a more intimate knowledge of the people, tlieir ways of thinking, and their req uiremen Ls. Much can be done by judicious advcrtisiug, appropriately illmitl'ated, Lut with one or two exccptiuus the advertisement,; usually displaycLl convey little or nothing to the native, who ii:; not in contact with foreigners, or who has never visited a largt.: treaty port. It is the fashion to rail at the abyssmal ignorance of Chinese regarding things European. An almost equal amount of ignorance prevails in Europe regarding things Chinese, and anything which tends to remove misconceptions or to lead to a closer mutual acquaintance is deserving of support, As an instance of the astounding statements one occasionally meets regarding China, may be cited a letter, signed by an East India merchant, which appeared in the June number of the British Trade Journal, and with every appearance of authority, informs the readers of that useful publication, that a large proportion of the needles imported by the Chinese "are employed as ornaments for decorating the tombs of their ancestors."

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CHINA. 55 An extended field of 1r.etion and maintenance in Shanghai of a lmilding, Lo be usr,
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CHINA. while in smtw articles of Europr,an origin, which ham estab lished themselves ]Jennauently in China, such as umbrellas, matches, socks, towels, singlets, &c., it would be difficult for us to compete with Japan, there would seem to be no reason why, in lamps and hardware, we should be cut out by the Continent of Europe. It might not prove remunerative for any individual firm to send out a representative to China to study the local market, but the precedent established by the Blackburn Chamber of Commerce of sending out special commissioners, with expert knowledge of the trade of their district, might well be adopted. No official can have expert knowledge nor give expert advice. He goes mainly by personal observation based on erroneous data, or collects such scraps of information as those already in the t.ade think they can with safety allow to l>e made public. Trade never was nor ever can be extended by official influence, its expansion must be the result of individual effort on the part of the merchant, and if anyone has reason to suppose that there is a likelihood of China proving a remunerative market for the specialty in which he deals, and he is prepared to spend a certain amount ol' money in finding out whether his supposition be correct or not, ho ought in the firi:;t instance, to make up his mind to defray for six months the r,xpenses of ft special expert agent to study local con ditions of trade on the spot. The 700l. to 800l. so expended might in the end return a handsome profit, or again, it might ::tvert a sn bstantial loss. A recent writer has called attention "to the halluci111tin11, which exists regarding the foreign trade of the people of China, and to the anxiety of the western nations to secure it at any cost, as if dense population were the measure of commercial possibilities." He goes on to compare China's foreign trade (population 400,000,000, tmde 69,000,000Z. sic) with that of the Argentine Republic and Chile (aggregate population 8,000,000, trade 80,500,000l. ), and states that "this is the difference between the inertia of old age and the activity of youth." The comparison is, however, defective in that it leaves out of account the immense volume of China's internal trade. For centuries China has been independent of the outside world, and left to herself C()nld easily continue to be so. what the nations of the West have to struggle for is their share of the supply or the luxuries to which she is accustoming herself, and for whiclt she can only pay l1y developing her mineral resonrcns.

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CHINA. 57 NoTE.It has beeome the practice to cavil at u11due delay in the matter of the compilation of Government reports, and it may cause remark that a review of the trade of China in 1901 should not be despatched until August, 1902. That this should be the case is due, (1) to the unusually late publication of the Chinese Customs Returns of Trade, which are not even yet obtainable in their complete form; (2) to the non reaeipt of certai.n important Consular trade reports; and (3) to the writer's connection with the Treaty Revision Commission, which for the last two months has absorbed the major portion of his time. Subsequent events have to some extent modified the general situation as described in Section I, which was written early in June, and insufficient information, on which it was not deemed advisable to wait longer, render the concluding sections somewhat incomplete. Rather, however, than run the risk of publication being deferred until 1903, it has been deemed advisable to send the review off as it stands, D.ncl it is hoped that its shortcomings will receive consideration 011 these grounds. (179) E

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LONDON Printed for His Majesty's Stationery Office, BY HARRISON AND SONS, Printers ir Ordinary to His Majesty. (1400 11 i 02-H & S 179)