3. Section 3 of Article VIII of the British Treaty states that native produce, when transported from one place to another in the interior, shall, on arrival at the first native custom-house after leaving the place of production, pay duty equivalent to the export surtax mentioned in section 7. When one compares this charge with the surtax on imported goods from abroad, it is manifestly too low. Leaving out of account native produce for export abroad, the majority of articles subject to this charge are for home consumption, and, should the Chinese Government desire to raise the duties leviable thereon, they are at perfect liberty to do so, such action on their part not doing much harm.
In the event of the Chinese Government finding that the above-mentioned two items show a loss which has to be made good, there can be no objection to their raising this charge to a full 5 per cent.
4. Section 7 of Article VIII further provides that in the case of silk, whether hand or filature reeled, the total export duty shall not exceed a specific rate equivalent to not more than 5 per cent. ad valorem, and that cocoons passing native custom-houses shall be liable to no taxation whatever.
Now, silk is used exclusively for manufacturing purposes, and is precisely on the same footing as cotton, &c. It ought not to receive any preferential treatment, and this paragraph should be expunged.
5. Section 9 of Article VIII contains the following: "A rebate of the import duty and two-thirds of the import surtax is to be given on raw cotton imported from foreign countries, and of all duties, including consumption tax, paid on Chinese raw cotton used in mills in China."
This provision gives great preferential advantages to textile manufacturers in China, and is correspondingly harmful to Japanese industries of a similar nature.
Having raised the duty on foreign imports, to grant exceptional privileges of this kind is too inconsistent a policy, and this paragraph ought, therefore, to be deleted, or else complete exemption from export duty and all other charges be accorded to Chinese cotton exported to foreign countries.
6. According to section 10 of Article VIII, a member or members of the Imperial Maritime Customs staff shall be selected by each of the Governors-General and Governors, and appointed in consultation with the Inspector-General of Imperial Maritime Customs to each province for duty, in connection with native customs affairs, consumption tax, salt, and native opium taxes.
Bearing in mind how divergent the views of the Powers are, this paragraph should be cancelled, as there is no likelihood of its being agreed to. If China is anxious to take action of the nature indicated, she must first ascertain the proportion which the trade of each country bears to the aggregate of her foreign trade, and appoint superintending officers accordingly.
(Translated from the Chinese text, published in the "Universal Gazette" 4th January, 1903.)
Shanghae, January 9, 1903.
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