THE CHINA MAIL, FEBRUARY 5, 1937.
ECONOMIC OUTLOOK IN CHINA
were asked my general im- pression of China, I should say
By Sir Frederick Leith-Ross, K.GB, K.C.M.G.
that the first thing that struck eggling in North China have at China was on
was its vast area.
year, that exports have been en- couraged, imports have kept steady and the trade balance has very silver standard largely improved in fact, I should I believe it would be possible to least circumscribed the damage, and has used silver as its cur ney say to day that China has a credit take the whole of Europe and put and the actual amount of smuggled for many generations. That work-balance on current international it inside the map of China with goods now coming into China is ed very well so long as the value account. Of course, there is a out there being many bulges, so much less than it was. The re- of the silver kept in relations to great deal yet to be done. The that when you hear it said that storation of the authority of the the value of commodities, but a currency reform has to be com~ there are trouble in China, there National Government in the South couple of years ago a certain sec-pleted by a reorganisation of the is no need to be too alarmed. Start- West, offers the hope that it will be tion of the American Senate Central Bank. The Budget must ing from Shanghai, you can take possible to establish closer rela-thought that the salvation of the be made to balance, and the ad- boats or trains or planes and tions between Hong Kong and the world depended upon raising the ministration of the public services travel north to Peking, west to mainland. This restoration of the price of the silver metal, and they must be reformed and strengthen- Chengtu, south to Canton, without unity of China is a triumph for the succeeded in doubling its value in ed. All these things must take a any difficulties about passports or Naning Government and for its a very short time. Then China long time, but I believe that the customs barriers, and without any chief, General Chiang Kai-shek, had to suffer the same deflationary Chinese Government is tackling sign of civil disturbance. In com-who has shown himself to be aleffects as Britain suffered in a these problems with energy and on parison they represent about the statesman of the very first quality, much less severe degree from the the right lines, and I hope that same distance as journeys from in the way in which he has dealt appreciation which took place in they will maintain a stable ad- London to Oslo or Budapest or with political troubles. China is a the value of gold. Prices fell ministration-long enough to work Warsaw or Madrid. If you can republic, but the constitution is not sharply, banks became illiquid, re-out a constitutional system that assure me that you can make these yet fully developed. There is no serves had to be exported. Finally, will enable that stability to become journeys in Europe without pass-established parliamentary system last November, it was decided to permanent.
are some areas
ing over an area where there is such as we have here. But public try the same remedy that we did, To sum up. I am an optimist some little trouble, then I will ad- opinion in China counts for as and China abandoned the silver about China; I feel that with her mit to you that China is in a worse much as it does probably in any standard. In both cases the effects great area and industrious popula- state than Europe. But China is country of the world, and I feel on the internal economy have been tion she is bound to have a great at present reasonably tranquil, con-that public opinion is at present very satisfactory A good many future and, given a period of peace sidering her enormous size and very solidly behind the National people in China when the change and good government, the oppor- huge population, and even if there Government. Certainly the Na-was first introduced were sceptical tunities for trade in China-are, I where trouble tional Government deserves it, be about it and thought it could not am convinced, almost unlimited. I exists, peaceful trade can be car-cause during the last five years it last, but I am convinced that the believe that the development of ried out without difficulty in most has successfully carried through fundamental economic conditions in China in this way will do much to parts of the country.
a programme of rehabilitation and China make the maintenance of a help Japan to solve her economic The next thing that struck me development on a perfectly amazing stable exchange a comparatively difficulties. I believe that this is be was the characteristic cheerfulness scale.
easy matter, and I am quite sure ing recognised in Japan herself, and of the population, and in particular
Towards a Stable Exchange that it would be extremely bene- therefore, however. gloomy things the untiring industry and endur- My own work in China was, official for our trade. The actual may look to-day, I am hopeful that ance of the people. In almost course, related mostly to the purely results to-day are that the currency the day may come when we shall every country the working classes financial problems and particularly reserves held by the Government be able to co-operate together with face hardships with cheerfulness, the questions of exchange and of banks are substantially greater China in the reconstraction of that but in China this is specially true credit. As regards the exchange, than they were at the end of last great country.
because there they have more than their fair share of hardship, and I think it is remarkable with what
good humour they meet whatever
comes.
Changing China
The third thing that struck me was the rapidity with which China is changing. I went out with the sort of idea one gets here about the "Unchanging East," and I found the Chinese Government was introducing large changes with great rapidity. I do not mean to say that everything is changing; there are plenty of ways in which proposals for alterations can be stymied. Dilly and daily were well known in China long before we heard of them over here. At the same time, when the Chinese Gov- ernment makes up its mind to get something done, it proceeds to carry it through with remarkable energy and rapidity. This applies not only to schemes of develop- ment, railway equipment, road con- struction, land settlement, but also
to legislative reforms. If any-
thing, I should say that China is perhaps trying to do too much at the present moment and may, in the effort to rehabilitate herself, tend to overstrain her resources.
The year during which I was in China was a very eventful one. The financial crisis which terminated with the decision of the Govern- ment to abandon silver as the cur- rency of China, was at its height. There was a very acute banking and economic crisis. Later in ther winter or early spring there was acute trouble in the north of China, and a great deal of sang- gling in that area which tended to undermine the credit of Chin
I left there were a
phets of gloom
gone far bette
Currency
will refer in
remarkably
exchange has beenem
firmly without
The measures.
of differ
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