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of trade. A quarter of a century ago, at the request of the Chinese Government, a paper was compiled and appeared as a Customs publication,* which, after exhaustive inquiries, endeavoured to portray the commercial liabilities and assets of China in international trade. While it is not intended to attempt any analysis on these lines in this report, a brief reference to this interesting work at the present moment may prove of value, more especially as the date of its publication followed closely on a period during which the previous lowest price in the history of silver had been record- ed and the Boxer Rebellion had been responsible for the advent in China of large garrisons of foreign troops and a corresponding increase in the numbers of foreign men-of-war on the China station. China at that time had an "adverse" balance of trade, as gauged by the statistics of visible exports and imports, of approximately 74 million Haik wan taels, although her total exports trade, which had then reached its zenith, amounted to less than one-quarter of its present value. But after a careful computation of all pertinent factors and utilising, on the asset side, only the most conservative estimates, it was found that China's commercial assets actually exceeded her commercial liabilities. It is not proposed to give here the various headings which were then considered, but the statistician who ventures a comparison on these lines of China's trade a quarter of a century later must bear carefully in mind the effect of the tremendous development of the tin and rubber trades in the Straits Settlements and its influence on remittances from einigrants abroad; the profits accru- ing to residents in China from companies owning plantations there but established and registered in Shanghai: the proportionate decrease in the net profits of foreigners remitted to home countries consequent on China dealing directly with manufacturers at home, often through her own banking institutions instead of through small com- mission agents financed by foreign bankers; and, finally, the large influx of foreigners into China who intend to make, and in many cases have already made, their per- manent homes in this country, encouraging the investment at present low rates of exchange of enormous sums of foreign capital in real estate. Sight must also not be lost of the fact that, of the profits made by foreign companies in China, a large percentage is distributed to Chinese shareholders and remains in the country. A comprehensive survey of the economic situation on the lines indicated is probably not within the competency of any statistical bureau at present established in China, but this brief reference to China's commercial liabilities and assets in international trade may help to serve the purpose of modifying the preconceived ideas of those con- tributors to the press who put forward as an axiomatic dictum that China cannot be prosperous unless her present visible balance of trade be reversed.
Direction of Trade
Appended is a table which shows the merchandise balance of trade between China and each of the countries named during the last three years. In analysing this table it must be once more emphasised that the countries of provenance and destination are those recorded by the Customs in accordance with the declarations made by importers and exporters or as appearing on bills of lading and shipping orders. Every en- deavour is made in the interests of trade to encourage merchants to state the correct countries of origin and the ultimate port of discharge, but in the main such requests meet with little or no response, and at the moment China lacks adequate machinery with which to compel traders to make accurate declarations. This is especially notice- able in the case of goods shipped at Antwerp, which, although of German manufacture in many cases, are recorded in the Customs returns as being of Belgian origin, and this is still more true in the case of Hongkong, which is, to all intents and purposes, merely a port of distribution and transhipment. The recent provisional modification in the application of the Customs Tariff referred to in the preamble of this report has un- doubtedly induced merchants, in their own interests, to make correct declarations in the case of cargo of Chinese origin transhipped at Hongkong for a Chinese destination, but the bulk of the balance of direct trade recorded as being with Hongkong is still neither the produce of that Colony nor is it destined for consumption there. Turning to the table itself, and eliminating from all calculations the figures for Hongkong as being in debate, we find that the rest of the British Empire has maintained its position
* "An inquiry into the Commercial Liabilities and Assets of China in International Trade" (Chinese Maritime Customs Publications: Special Series, No. 27; Shanghai, 1904).
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