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THE HONGKONG WEEKLY PRESS AND
THE SHANGHAI COTTON INDUSTRY"stead of being carried to Japan or some
AND THE LEKIN QUESTION.
An
An important announcement is made in the Japan Mail affecting the prospects of the cotton industry at Shanghai. A conven- tional stipulation is said to have been already concluded, though it is not yet in force, to the effect that produce in China which, having been carried to a port of shipment for the purpose of export, has consequently, been exempted from any inland charge other than the commuted tax of one half of the export duty, may be relieved from the necessity of export and be sold locally on payment of a further tax of five times the cominuted likin. In other words, supposing that an article intended for shipment abroad be liable to export duty amounting to 5 per cent, ad valorem, then its total liability in respect of export and likin would be 71 per cent.; whereas if it be not shipped abroad but offered for sale at the port of shipment or elsewhere within China, it must pay an im post of 15 per centum. It is not stated with whom this conventional stipulation
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to us, therefore, that whereas mill-owners "in Japan can now procure raw cotton from China by paying to the latter a total tax "of 4 per cent. ad valorem, they will find themselves obliged to pay an impost of 20 or 30 per cent. on the same cotton if they establish mills in China to spin it." Then follows an intimation that the ques- tion is not likely to be included in the negotiations now taking place between Earl Li and Baron HAYASHI, and that "Japa- nese capitalists ought to investigate this point before they sink large sums of money in Shanghai mills. Otherwise they may "find themselves ruinously handicapped when they come to purchase cotton for their work.”
January
that there will be no lack Shanghai, and that avaricious as they are, will their interest not to kill taxes what promises to be lucrative source of revenue.
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"other foreign country, it be intended for "manufacture into yarn at a Shanghai mill, "and then for sale in the markets of China, obviously the Chinese authorities may re- quire it to pay an inland tax of 9 per cent. at least. That, indeed, is too favourable a "statement of the case. The fact is that such 'cotton, not being certifiable by its foreign purchaser supposing it to have been pur- chased by a foreigner at the place of
pro- duction would be liable to be taxed at every lekin station passed en route for Shanghai, and by the time it reached the "mill it would probably have been mulcted to the tune of 20 or 30 per cent. Possibly there may be an idea that the Chinese Government will make an exception in favour of raw cotton; that, having "
granted permission for factories to be esta- "blished at the open ports, it will extend "its complaisance to the raw material re- quired for manufacture. Such a hope C appears to us quite chimerical. As
suredly it is entirely opposed to the practice invariably adopted by the Chi- been made, but presumably it forms one of nese authorities. They take no thought the terms of the commercial treaty now in whatever to foster trade-trade in foreign course of negotiation between China and
hands above all-but regard it simply as Japan. Possibly Japan thinks she has
a means of procuring revenue. Moreover, made a mistake in stipulating in
"the Chinese themselves are engaging in the treaty of peace for the importa "the cotton-spinning business, and there tion of machinery into China and will naturally be a disposition to dis- the establishment of manufacturing in-criminate against the foreigner. It seems dustries which may compete with her own. The article in the Japan Mail seems to in- dicate as much and that the heavy taxation of raw produce that has been assented to is intended to remedy the mistake, The article may, in fact, be read as a warning to Japanese capitalists against carrying out their intention of establishing mills at Shanghai. Surprise is expressed that neither in the prospectus of the projected Japanese Cotton Company nor in the published projects of foreign companies organized for a similar purpose, does any statement appear, as to the method of procuring raw cotton. Yet that the one vital question. Were it not for the apparent economy to be "effected by obtaining Chinese cotton in "loco, there would be no special inducement
The point ought also to be investigated "to devote large sums of money to. the by European capitalists. If the success "establishment of spinning factories in of the cotton industry at Shanghai were Shanghai." Our contemporary then goes dependent solely on Japanese good on to speak of the difficulties that may be will the hopes of the promoters might be experienced in obtaining raw cotton. The doomed to disappointment, for Japan ap- lekin question is referred to and the provi- pears to be huffed at what the Japan Mail sion of the Tientsin treaty allowing the ternis the exceedingly unsatisfactory re- commutation of inland charges on produce cognition accorded to Japan's cosmo- intended for export by the payment of an politan liberality in framing the Shimo- additional half-duty is quoted. But pro- "noseki Treatly." It is probable, however, duce not intended for export is not entitled that the conclusion of the commercial treaty to the exemption. Consequently raw cotton with Jupan will be followed by a revision of not intended for export will fall within the the treaties with other powers, and even category of ordinary Chinese produce pass-without such revision representations might ing from one place within the empire to be made by the Ministers of the another, in search of a market, and will be various countries whose subjects liable to be taxed at every lekin station en interested in the industry. At the same route. What such taxes would aggregate time it is possible the Governments our contemporary cannot state with precision, might take the view that they were not but says that a rough idea of what lekin specially interested in facilitating the build- means may be gathered from the conven- ing up of an industry intended to compete tional stipulation referred to at the com- with those of Europe and America, and mencement of this article, namely, that pro- might be disposed to leave China to tax her duce which has been carried to a port raw cotton as she thought fit. The point is of shipment for the purpose of export may an important and interesting one, and it be sold locally on the payment of a further would no doubt be reassuring to the share- tax of five times the commuted lekin. The holders in the various cotton Companies that article proceeds :-
have been floated to be authoritatively in- formed what the prospects as to the supply of the raw material really are. It may turn out after all that the Companies have made a mistake in going to Shanghai instead of coming to Hongkong. We suspect, how- ever, that it will be found in actual working
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Observe how this applies to the case of "raw cotton. It pays at present a specific "export duty representing about 3 per cent. ad valorem. Hence, it can be carried from the interior and shipped to Japan by paying a total impost of 44 per cent. But if, in-
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MR. DEMETRIUS BOULGER ON THE PARTITION OF CHINA.
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In the Contemporary Review for December. Mr. DEMETRIUS BOULGER has an articles "The new situation in the Far Dast taking as his text the following passage from an article in the Russian journal Novosti -——— "The final advantage will rest with thất: Power which shows most skill in under standing and in shaping to its own ends "the new conditions brought into being by "the war between China and Japan," The old situation in the Far East, Mr. BOULGER says, was based on the assumption that England possessed there not merely a yast commercial superiority, but a diplomatic pre-eminence which would prevent single State from pursuing an original policy. of its own. Mr. BOULGER agrees with every other writer on the subject in acknowledging that that diplomatic pre-eminence has been destroyed. We cannot, however, share, his regret that England did not try to establish her position by holding on to coat-tails of Russia, France, and Germany and objecting to Japan's acquisition of Liaotung. What chiefly damaged England's prestige was Lord ROSEBERY's abortive attempt in the early stages of the war to secure united intervention, but that damage having been sustained it would not have been repaired by our joining the other Powers later in the day in thwarting Japan. The importance of Mr. BoULGER'S article, however, lies not so much in its criticism of the past as in its suggestions for the future. "Our diplomacy" he says, " "not so much at fault; the grand defect was "the want of a clear and rational policy "and if we are to hold our own in the Far “East it must be promptly found.” ́ What is the policy he suggests? Briefly stated it is this, namely, that England should pro- ceed on the assumption that Northern China will pass under the control of Russia and that the development and realisation of Russia's plans will entail counter measures on our part. 'At Shanghai," Mr. BOUL- GER says, "We control the most important and valuable portion of the trade of the "whole Empire. In Hongkong we have a commanding base for operations. If we care to take the initiative, we could pro- "mote the creation of independent Govern- "ments in more than one of the most populous provinces of China. Very pro- bably they would be no better than the one they displaced, and perhaps no remedy would be found short of the gradual ex- tension of our own authority. Thus in- sensibly shall we be drawn into the con- quest of Southern China-the richest and "most prosperous provinces south of the "Great River. While deprecating the necessity, we should take steps in goo "time for such a contingency being forced
upon us, and railways to the frontier "and even into, the province of
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are as necessary from our point of the Siberian line is for Russia China's western provinces of Szechuen and Yunnan, contiguous as they are to differ ent parts of British India would constitute a kingdom which al
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might be proud, and with railways to "their doors they would easily fall to
share in the impending disruption: of
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