KIAOCHAU
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Imperial German Government. The Commissioner of Customs in his report for 1906 comments on the arrangement as follows:-"The principal object of the arrangement, which moreover afforded the opportunity of a political rapprochement and material concessions for mutual benefit on both sides, was the creation and promotion of trade and commerce between the Pachtgebiet and the Chinese hinterland. The results of the first epoch have conclusively proved the wisdom of this novel arrangement. Under it trade developed beyond expectation and rose from a value of 2 million Taels in 1899 to 22 millions in 1905, and Tsingtau, the former dilapidated fishing village, grew into a handsome city with a flourishing mercantile community and a considerable number of manufacturing establishments, giving promise of good profits and further develop- ment. Its success emboldened the merchants, foreign and Chinese, to ask for, and the Government to agree to, going a step further and arranging for the limitation of the free area, which formerly comprised the whole Pachtgebiet, to the harbour on much the same lines as the German free ports Hamburg and Bremen. The chief advantage of this step lies in the removal of Customs control from the railway stations to the free area, and the consequent freedom of goods and passengers to pass in and out, from and to the hinterland, without hindrance or control of any kind-a traffic simplifica- tion from which a considerable increase in trade was expected. The new arrangement has inspired confidence in the stability and future of the port and is attracting artisans, traders, and wealthy Chinese firms, which last, hitherto dealing with Chefoo, have until now kept aloof from this place. The gratifying development of trade which set in under the new Customis arrangement in 1909 continued unabated during 1911 and 1912. The total value of trade increased from 30.7 millions Haikwan Taels in 1906 to 39.7 millions Haik wan Taels in 1909, and reached a total of Tls. 56,330,321 for the year 1912, or an increase of 20% over the previous year, notwithstanding the disadvantageous conditions for trade caused by the recent troubles in China. Kiaochau has now become the principal market in North China for strawbraid. The Bay of Kiaochau is an extensive inlet about two miles north-west of Cape Jaeschke. The entrance is not more than 14 miles across, the east side being a low promontory with rocky shores, with the new town of Tsingtau ("green island," from a small grassy island close to the land) about two miles from the point of the peninsula. On the west side of the entrance is another promontory with hills rising to about 600 feet. The shore here is rocky, and dangerous on the west side, but on the east side is a good stretch of sandy beach. The bay is so large that the land at the head can only just be seen from the entrance (about 15 to 20 miles away), and the water gradually gets shallower as the north side of the bay is approached. The old Chinese Kiaochau city stands at the north-west corner of the bay about 5 miles from the sea and beyond the frontier of the German Protectorate. At Tsingtau there are two anchorages for big ships; the larger and better one is round the point of the east promontory, on the north side, and the other, smaller one, on the south side. A new mole was opened on March 6th, 1904, which accommodates five vessels with berths. A second mole was opened a few months later, and a third for kerosene ships has since been constructed. Both have direct connection with the railway. About 20 ships can be berthed simultaneously in the harbour.
The hills, in former days merely bare rocks of granite and porphyry, are now clad in fresh green owing to an extensive scheme of afforestation, which was decided upon in the early days of the colony. The soil of the valleys between the ranges and the plain country on the north-east is alluvial and very fertile, and is carefully cultivated. Wheat, barley, beans, millet, maize, and many other grains in smaller quantities are grown. The foreign residential quarter at Tsingtau has been well laid out, and there are some good foreign hotels. The first so of the Shantung Railway was cut by Prince Henry of Prussia in October, 1899, and the line to Chinanfu was opened on the 1st June, 1904. It has done a prosperous business from the day it was opened. In 1912 the goods traffic over the line amounted to 852,001 tons; 1,230,043 passengers were carried in 1912, which means an increase in passenger traffic of 36% over the previous year's figures. The coal mines are progressing favourably. The output of the Shangtung Mining Company at Fangtse and Tsetchuan (Hungshan) in 1912 was 573,676 tons. The excellent Hungshan coal enjoys an ever-increasing demand for bunker coal.
A brewery, soap factory, and two albumen factories are in full work, as well as the Government slaughter-house and ice plant. A large hat factory fitted with the most up-to date appliances is also in full operation. There is a big export of cattle to Vladivostock. Fruit grafting is just becoming a promising enterprise. The develop- ment of the town of Tsingtau has made considerable progress; the town is thoroughly lit by electricity, houses are springing up in all directions, and a system of water
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