SUPPLEMENT
Hongkong Daily Press.
Registered as a Newspaper we the General
"Poser Office in the United Kingdom.
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刺孖 ESTABLISHED 1857
15-19 Marina House, Queen's Road Central G.P.O. Box No. 1.
HONGKONG. SATURDAY JULY 8, 1939.
CHINA'S WAR FINANCES AND FOREIGN INTERESTS
OF
$530,000,000 PAID FOR SERVICES EXTERNAL AND INTERNAL OBLIGATIONS
In Spite Of Japanese Interference In Customs And Salt Revenues
CHUNGKING, July 6 (Central)-In spite of the Japanese interference with the Customs and salt re- venues in the "occupied" areas, and their attempts to undermine China's currency, China paid out not less than $530,000,000 for the services of external and Internal obligations, according to statement on "China's War Finance and Foreign Interests" issued by Dr. H. H. Kung, President of the Executive Yuan and Minister of Finance, on the eve of the second an- niversary of the outbreak of the Sino-Japanese hos- tilities.
"The statement reads.
$
scientious efforts in recent years arrangement to maintain China's to adjust the mess of defaulted debt service as far as practicable. debts inherited from the former and it hopes that these negotia- Peking regime, at a time when the tions will soon be brought to a world's financial markets were not satisfactory conclusion, to the end. infrequently upset by defaults, that the interests of China's bond- moratoria and downright repudia-holders may by safeguarded. tions of national debts.
Amidst the more spectacular de- -China's determination to uphold | volopments in the front, foreign her credit has been such that, for friends should be interested to well over a year following the note the rapid and large-scale, outbreak of the present hostilities, economic development that is forg- she continued to meet her debting ahead in the rear. Strenuous service fully and regularly.efforts are being made to combat Maintenance of debt service, In wartime difficulties in the normal spite of the enormous urgent de- development of trade, industry, and com- mands on the national treasury for mining, agriculture war expenses and enforced read-munications, not only for the justment of the country's financial immediate necessity of prosecuting and economic life as a result of the war but also to build up a new the hostilities. explains why economic empire in China's vast China's credit in both foreign and hinterland, the Northwest and domestic markets remains intact. Southwest
That it imposed great hardshipsThis significant progress has ac- › [testimony or confidence abroad in on the Government and people to quired a momentum, that is fast
China's financial future.
SIGNIFICANT FACTOR
The expectations of those who, at the outbreak of the present
keep on paying cannot be doubted. remaking the hitherto undeveloped Sino-Japanese hostilitles, predicted
But without seizing upon some interior provinces and is carrying A most significant factor in the pretext for declaring a general the country along in spite of dif» the early collapse of China's finances as well as of her army war finance, likewise of importance financial loins and paid.
successful' management of China's moratorium, China glided her ficulties. It is an undertaking in have been sadly disappointed. Toto foreign business interests, is
reconstructing the economic pos- ribilities of which are of immense importance to foreign and Chinese Interests alike.
to
For the first 21-inonths of the
day, after two full years of the maintenance of exchange. Like war, China paid out not less than strenuous war operations, China's. financial structure remains intact, any country at war, China has had $530,000,000 for the services of ex-
VAST PROGRAMME" with facts pointing to continued to meet certain currency difficul- ternal and internal obligations.
tfes which are the ability to stand the strain.
necessary This performance is all the more In carrying out this vast pro- adjuncts of warfare, and has remarkable in view of the Japan-gramme of economic development Admittedly the financial pro-found it necessary
permit ese interference with the lion's simultaneously with armed re- blems confronting wartime China adjustment to economic and trade share of the customs and salt resistance, the Chinese Government are as enormous as they are many conditions. Nevertheless, thanks to venues-the two principal securi-continues to welcome the financial But there are reasons why China's the strong foundation laid in the ties for China's obligations--and and technical assistance of friend- Anancial ability to endure a pro: Currency Reform of November 1935, of their attempts to disruptly Powers. The principle of n- tracted. war is greater than the she has been able to maintain China's currency structure. Between 'ternational development of China," enemy has conjectured,
the exchange stability of her cur- July 1937 and December 1938, so wisely laid down by the Father During the few years preceding rency to a degree generally regard-the Government advanced for the of the Chinese Republic, the late the war. China had by carefulled as remarkable. She has also service of customs-secured obliga- Dr. Sun Yat-sen, remains and will planning and persistent efforts combatted with notable success tions alone a total of $175,000,000 remain the watchword of China's 'greatly strengthened the founda- the sinister schemes of the Ja from other sources in order to policy in national reconstruction. tion of her financial and economic panese and their sponsored puppet make up for the funds that should structure. This significant progress regimes to undermine the cur- have been remitted from areas un- has enabled her to enforce mearency.
der Japanese occupation.
sures required to combat-wartime Throughout the period of financial difficulties and to rein-hostilities, China has main- force the national economy essen- tlal to a war of attrition
DECLARED POLICY
The people's progress toward political unification, coupled with their new-born patriotism
and loyal support of the Government's declared policy. has further strengthened the Government's hand in managing the nation's wartime finance.
ค
tained both in "occupied" and nnoccupied areas an accepta- ble medium of exchange which has consistently been demand- ed by the people in preference to the issue which the Japan- ese and their puppets have at- tempted to circulate, and which has the great advantage of free convertibility into foreign currency.
com-
China appreciates foreign co-operation not only in main- taining her financial stability in wartime but even more, in tackling the sillt greater pro- blems of economic rehabilita- tion that will follow in the "wake of hostilities.
As a result of Japanese oc- cupation of salt-producing areas and routes of munication and the seizure of salt revenue offices, partieplar- ly in Hopei and Shantung,
At the same time, Western · China
felt compelled 'last Powers can no longer ignore the September to suspend tem-
fact that Japan's undisguised acts of porarily the amortization pay-
lawlessness and international bi- ments then due on the Crisp
gandage in the present Far Eastern and Anglo-French loans.
conflict constitute a real and .;. Moreover, in view of the forcible serious menace to their own' vital detention by the Japanese of the political and economic interests. customs revenue in the war zones They must fully grasp the
The relatively simple pattern of The surprise of the past two despite their assurances and de-reaching international significance China's economic life, which, is rear operations is not that spite all efforts to induce them to of these acts, namely, that clearly essentially agricultural and self- China's currency has been sub- allow remittances in respect of It is Japan's set policy to seek the sufficient in many respects, is less lected to severe tests but that it all China's obligations that were conquest of China as a stepping- vulnerable to unsettling effects of has withstood so well the enor- secured thereon at the time stone toward attempting to realiza a major war than is Japan's highly mous strains imposed upon it b7 of the outbreak of hostilities her lustful ambition of achieving industrialized system.
the hostilities and the enemy's the Chinese Government was very the mastery of Asia, hegemony in onslaught. Little wonder that such reluctantly forced on January 15 the Pacifle and eventual dimina a creditable showing has inspired of this year to take remedial action over the world. confidence both at home and tion.
Aside from the supreme issues
China's vast hinterland, rich
in mân-power and natural re- sources, together with the re- markable power of endurance and recuperation which characterizes the Chinese race, has enabled; the Government to erect therein a strong base. for national resistance and re-. construction and to adopt a' policy of playing, for time.
יו,
abroad in China's financial outlook. As from that date, the Ministry of world peace and democracy in
Appreciation must be recorded or of Finance declined to make fur-volved in much a policy, the ques- the friendly assistance which the ther advances to the Inspectortion may be asked: Can the future United States and Great Britain General of Customs and instructed of foreign rights and interests be have extended to China, in this him to open special accounts in suaranteed by a lawless, aggres- connection. The former by its ar- the Central Bank of China in Sve, militarist Japan, who, if she rangements for aver purchases which periodically are deposited a should succeed in her present from China and for the US$25,000,- share of the long-term debt service ambitious adventure, would "con- Last but not least, spontaneous Bank last December, and the laxareas not subject to Japanese natural resources and be further 000 credit from the Export Import proportionate to the collections in trol China's vast man-power and
worldwide sympathy for China's just cause and growing realization China and by cooperating with Government on March 28 took ac- Western induence and interests in ter, by extending export credits to terference, For similar reasons, the strengthened to dominate all- that Japan's policy of lawlessness Chinese banks in the creation of a tion in relation to the salt loans the Far East, or will it be better and aggression is as much a real joint Currency Stabilization Funa similar to the arrangements con- safeguarded and promoted by a menace to the economic interests of £10,000,000 have both rendered cerning customs loans,
new China that will emerge from. and political security of third
material help in the smooth opera-¦ SYMPATHETICALLY RECEIVED her present struggle orderly, pro- Powers as it is to China's freedom tion of China's currency policy. It is gratifying to note that gressive, peace-loving and anxious and independence, is an important while at the same time benenting these temporary measures, adopted to cooperate with friendly Powers believe, continue to operate in their own economic interests in by force of circumstances, have in her development for the com-
the Far East. favor
been received in the financial mon benent of the world and or China's financial of stability. The recent financial and
OUTSTANDING FEATURE markets with sympathy and un- her own people? economic' "assistărice
To those who have, during which Another outstanding feature of derstanding. At the same time, the America, France, Great Britain, China's war finance that is of im-Chinese Government has been the past two years of hostili- ties, witnessed their vital Russia and other countries have portance to foreign interests is the concerned to continue its debt
rights trampled on, discri extended to China presents a strik Government's scrupulous anxiety service despite the unprecedented
minated against and destroyed ing contrast to the fact that in to live up to China's obligations dimenities of the war
with impunity by the invading the world's financial capitals the No better evidence of China's As announced on March 26, it
hordes In China, the aestion doors of borrowing are closed to honorable record could be furnish has initiated negoti Japan. It is in itself an eloquented them bez courageous, and can view, to arriving> at 1. resmenáhle
factor which operates and will... 1