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report.

When dealing with the industrial situation it must be

pointed out that there are three different kinds of industries with which we have to deal:

1.

Purely British Companies;

2.

a large Chinese interest;

British Companies in which there is

11

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1.

own.

3. Chinese owned Industries.

INDUSTRIES OPERATED AND COMPLETELY OWNED BY BRITISH COMPANIES:- At the present moment these are now all operating successfully, but the continued isolation of the Yangtszepoo are a and the many restrictions imposed by the Japanese authorities make business conditions difficult. Skilled Chinese workmen cannot be expected to walk miles to their work and still be in a fit con- dition to carry on their duties. The re is the perpetual tisk of interference with labour at the hands of the Japanese, and many Industrial concerns are therefore compelled at considerable expense

These transport to transport their Chinese work people by river. difficulties have been aggravated by the absence of the usual transport facilities which have been forced out of this area by Japanese restrictions. Resumption of tramway and bus service has been forbidden although the Japanese, in violation of the franchise granted by the Municipal Council to the China General Omnibus Com- pany are to some extent operating an inferior bus service of their

Free access is also denied to many wharves with the result that most of the Steamship Companies have to maintain tender services.

and from for the conveyance of passengers, baggage and mail t their vessels. A further handicap to Industries is the fact that residence by foreigners in the Japanese controlled area cannot as yet be considered safe or desirable owing to the restrictions upon the movement of Chinese servants and the licence permitted to Japanese soldiers and sailors when off duty. The obtaining of the necessary passes and the overcoming of restrictions is not an easy matter and causes much inconvenience, as do also the restrictions for free movement of cargo and the delays due to the necessity of obtaining permits to transfer material to and from Japanese controlled territory, difficulties with which Japanese nationals do not seem to have to contend. At the present time it is still impossible to move machinery of any description out of these areas; thus in the case of a breakdown and the necessity of removing certain machinery for urgent repairs considerable financial loss is liable to result as a result of the delays thus incurred in completing repairs.

A new development of recent date is reported from some of the British Industrial concerns.

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