Įkave been favoured with a statentent of the alinated import and export of Treasure at Hongkong during 1904, from which I deduce the following figüres for the movement at that
Chiness
Non-Chi-
porti
IMFORT.
Gold. Silver. Hk. Th. Et. Tls. 1,286,656 22,750,458
EXPORT, Gold, Silver. Hk. Tis. Hk. Tha
192,909 16,764,221 |
11,808,763 9,659,840 9,830 485 3,137,450
12,790,421 32,410,808 9,823,464 19,901,671 Total Hk. Tia.«. 45,200,819
2:4,725,135
• Including inconsiderable quantities to and from Maono. Accepting these figures as correct, there was gain to the banking reserves of Hongkong during the year of gold and silver amounting in value to Hk. Tls. 15,475,684, or about 23 million dollars, of which nearly 19 million dollars were in silver. This is not inherently impossible: the dollars serving the trade of South China are generally chopped, and so are available for shipment outside the area only as so much bullion; and, with constant robberies from Native craft in the Canton waters, it is not likely that there was much unrecorded shipment by junk. On the basis of these figures the movement of treasure between the com- mercial area including Hongkong and the Chinese ports, and all points outside that area, was as follows:--
EXPORT.
Gold. Sil er. Hk. Tl. Hk. Tls.
IMPORT. Gold. Silver. Hk. Tls. Hk. Tls. Chinese
9,797,851 6,754,415 197,779 14,377,910 ports Hongkong 11,503,765 9,659,940 9,630,465 3,137,450 21,241,616 16,414,355 9,828.24117,515,360
Total Hk. Ths. 37,655,971
27,343,604
↑ Excluding inconsiderable quantities to and from Macno. I give these figures with all reserve; but so- cepting them, the commercial ares lost a little over one million taels in the metal, silver, forming the currency of the Far East (again not includ- ing emigrants funds), and retained on balance 114 million tsels in value (about £1.650,000) of the commodity gold.
The statistical secretary of the Imperial Chinese Customs writes Attention has been recently drawn to the adverse balance of trade in China as gauged by the statistics of visible iniports and exports published in the annual Esturas of Trade at the Treaty ports, and it -has-formed the subjects of a pamphlet issued from this Department. Until the end of the war with Japan, in 1895, China had incurred practically no Foreign debt; as a consequence that war she was bardened with a debt of 230,000,000, or, say, Hk. Tls. 400,000,000, and the period to payments abroad under this head were further increased by the indemnities to be paid to Foreign Powers for their rescue operations in 1900-01; and now the annual pkythents under these two heads amount to apwards of Hk. T. 45,000,000 a year, The natural effect of this sudden increase in the
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THE HONGKONG WEEKLY PRESS AND remobing the exporting vessel (f.o.b.) including { all charges paid on Chinese soil.
only Tia: 1,000,000 to sell, then th up, as is the case always when demand One point which must be considered is that supply. If the price goes up, my,
The for with a steadily falling value of silver, the value £1 sterling, the Chinese Governin, nt must resigned to imports would ipso facto, be in- of neosasity buy; perhaps half the importers creased without any increase in quantities. | must buy, while half may wait for more inyour- This is true; but the effect of falling exchangeable exchange; and exporters, who did not on sports must also be considered. The intend to sell bills at Tls. 7, may, if they can Chinese are keen-witted; it may be accepted as receive Tis. 8, increase their sales from one mil- a fact that there are no shrewder traders in the lion to 1 million taels. In this case we ses world. The actual producer may know nothing that altering the exchange haareduced purch- of exobange, but between him and the Foreign | ases of bills from two million to one million kaels. exporter are innumerable middlemen, who are and has increased sales from one million to l keenly alive to every point which will advant-million taels. Here, again, the bank makes its age them in the warfare of trade. When we profit from the difference between buying and learn that the quotations for gold, i.e., exchange, | selling rates. Now the effect on trade is this: are telegraphed daily from Shanghai to the that the importer, having goods costing £1 gold merchants in far-way Ch'ong-tu, in Szech- sterling, could before sell them for Tis, 7, bat was, we may assume that no point in the game is cannot now cover cost unless he receives Tia. 8; lost to the Chinese jobbers in the Treaty ports, and the exporter. wishing to bay goods which with whom alone the Foreign exporter comes he can sell for £1 sterling, could before pay in contact. The price of Chinese products is only Tls.7, but can now pay Tls. 8. This explains not fixed by the cost of production in China, why purchases of bills were reduced and sales but by the price to be realised in the world increased; it also explains why, on general markets; for it must be remembered that, principles the quantity of Imports would be except in tea and silk, there is, in China, no reduced, and why both quantity and valus of conscious production for a Foreign market, exports would be increased. but that produce comes forward when the price offered is sufficiently attractive: even for tea the price is made by Ceylon, while Italy and France settle the price of silk. With this premise it will be admitted that the price demanded for exports will follow exchange as closely as does the value of imports, and that for a commodity which will realise £1 a pioul in Foreign markets, and for which £7 will be offered at a certain exchange, £8 will be demanded if exchange falls to a corresponding extent; and it may be assumed that the Chinese jobber will persist in his demand, and that the Foreign exporter will ultimately accede to it. From this it follows that, while the silver value of the same quantity of imports will be en- hanced by a falling exchange (cost of produc- tion being disregarded), the same cause will also enchance the value of the same quantity of exports, for the time being at any rate, and the proportion between the two will remain analtered. From the falling exchange comes the further result that the increased silver price, offerable by the exporter and obtainable by the jobber, will enable the latter to call out more of the latent resources of the country and provide more of its products for exporters who can see a margin of profit; and from this comes not only an increase in the value per unit of exported products, but an increase in the quantity exported as well.
Let us now consider the actual momentary effect of the periodis payments required from Chins on secount of indemnities-and I must premise that this paragraph is written, not for the benent of Western statisticians and finan- ciers, to whom my statements will be ariomatic, but rather for the information of Chinese officials, to whom operations of the Western world are matters of acquired knowledge. When the Chinese Government pays to the deppository banks an instalment of money
on
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In the same way that a merchant's assets and liabilities must be equal, so a nation's liabilities must be covered by its assets, and to this rule there is no exception in the case of merchant or of nation. But in the case of China we find that the liabilities, made up of Foreign goods imported which must be paid for, and of the indemnities, exceed by half the value of Native goods exported. This can only be explained, for China as for certain other countries, by the invisible assets. First, how- ever, we must explain that China's liabilities Under
are
even greater than here shown. liabilities for 1903 we have Foreign imports of a value of 310 million taels; treasure imported, $7 million taels; and indemnities, 44 million taals; but, in addition, we have Munitions im- ported, say, five million taels; expenditure for Chinese Embassies, Consulates, studente, etc,, abroad, say, four million taels; and profits of For- eign steamers, insurance companies, and Foreign merchants living in China, say, 23 million taels,
making a total liability of 428 million taels. Now we have to meet this liability. First there are the native goods exported, of a value of 240` million taels, and treasure exported, 83 million taels-total 273 million taels, leaving an apper. ent deficiency of 160 million tools. A smail de- ficiency in one year may be made good by an excess in another year; but a deficiency of this wise is impossible, and we have to look for the invisible assets which make up the amount, These come from two sources: from the Foreign- ers working for the development of China, and from the Chinese working for the development of Foreign countries. Under the first head come the expenditure for making railways, mines, etc., about 27 million taels; the expenditure for Foreign Embassies and Consulates, garrisons, war and merchant vessels, etc., sbout 39 million taels; expenditure for missions, hospitals, and schools, svy, six million tads; and money spent the due date, it is a popular belief by Foreign travellers
China, say, six milliqu that the silver so paid in is boxed and tasis,-a total of 78 million taels. The remit- national indebtedness should be a correspond shipped in its original shape to the several tances from the Chinese emigrants in Foreign ing increase in the shipment of Native produse Powers in the proportion of their claims. countries have been carefully studied, and it to cover the indebtedness, or, in the alternative, The fact is that on the due date the Chinese is estimated that in one year they cannot be less a reduction in the power of the Empire to Government becomes a buyer of bills for gold that 73 million taels, and may be more. sbsorb Foreign products imported. This has exchange. Now, bills of exchange are like other sources provide invisible assets of 150 million not occurred. Taking merchandise only, and commodities, the price depending on relative taels and more, and in this way the socount disregarding the movement of treasure supply and demand. Importers of Foreign balances. It must be remembered, however, that the wall whange of nations we find goods buy exchange, paying here the silver they while expenditure on railways is an asset in the that in a trade in which as shown in our have received from selling the goods and receiv-present, since material and money are now sent published statistics, imports and exports ing in Foreign countries the equivalent in gold by Foreign countries, in the future it will formerly about balanced each other, a diver- with which to pay the original cost; and expor- become a liability, since Chine must pay for gence began about 1896, which becameters of Native goods sell bils, receiving here them; if the railways are built and magaged on more tinrked from 1901-but it was imports the silver with which to buy the goods and business principles, there is, however, no reason which increased in undue proportion of value. repaying to the bank the proceeds of sale in why this liability should not be covered by their In 1908 the divergence had become so great Foreign countries. When the Chinese officials earnings. that the value of merchandise imported exceeded wish to buy exchange, they find that import- China's liabilities are balanced by the nausts that of merchandise exported by no less than
ers also wish to buy, and they both are compe.available to meet them, and at the moment 81 per cent, while in 1904 imports (Hk. Ths. ting for the bills to be sold by exporters. Sup- China is paying her way. Attention must, 844,000,008) exceeded exports (Hk. Tls. pose that on any given day the exchange is Tis. however, be drawn to the fact that no attempt 2280:486,688) by over 43 per cent. The value 7 for £l sterling, and the Chinese officials wish is made here to enter into the question of the sire these required for international exchange to buy bills for Tls. 1,000,000, and importers financial position of the Government Hard for deports, the value which must be sent also wish to buy for Tls. 1,000,000: if exporters hit though it is by the fall in the value of silver, on that day wish to sell bills for Tls. 2,000,000, which in 19 3 was 18 per cent, below the lowest then the rate of exchange is unaltered, and the point reached before 1395, when the first of its bank maken its profit from the difference Foreign indebtedness was incurrell, and 15 po between the buying and selling rates. But cunt. below the rate ruling in 48,0; still the suppose exporter in that day have bills for Government has never boð
the value at moment of leaving the Hingirerkel (cdify) before adding any sums degeither (to semeial or to commercial forsports, the vales which must be reosived from abroad, the value at moment of
These