[This Document is the Property of His Britannic Majesty's Government.]
CHINA TRADE.
CONFIDENTIAL,
No. 1.
72
[March 2.]
SECTION 2.
Mr. Townley to the Marquess of Lansdowne.--(Received March 2.) (No. 24.)
My Lord,
Peking, January 15, 1903.
I HAVE the honour to inclose copy of a despatch from Mr. Litton, from Yünnan-fu, asking instructions with regard to various points in connection with the application of the new Commercial Treaty to the special circumstances of Yunnan Province.
Mr. Litton's questions relate (1) to the amount of surtax leviable on the land frontiers of China; (2) to the levy of certain local taxes; (3) to the liability to consumption tax of cloth woven in Yünnan from Bombay yarns.
As regards the first question, the last paragraph of section 2 of Article VIII of the new Treaty seems to leave no doubt that the intention is that foreign goods entering China by land shall pay the same surtax as those entering by sea, namely, one and a-half times the 5 per cent. Protocol Tariff.
As, however, the Protocol raised to an effective 5 per cent. only, the Tariff on importations maritimes, not that on goods entering China by land, an identical surtax would represent a much larger proportional increase of the latter than of the former.
Goods entering by land probably pay on an average from 3 to 4 per cent. ad valorem less three-tenths, that is, from 2 to 3 per cent. ad valorem, and a surtax of 71/2 per cent. ad valorem would therefore be equivalent to trebling, or nearly trebling, the present duty on them.
Probably as France is interested in the land frontier trade, the French Government will raise this question before acceding to the Treaty, and it may be also raised by Russia.
In explanation of Mr. Litton's reference to the maintenance of the pre-Protocol Tariff in Yunnan, I inclose a Memorandum summarizing earlier reports from him on the subject.
As regards the taxes on produce mentioned by Mr. Litton, there can be no doubt that the "Prefect's tax" will become illegal, if the new Treaty comes into force, and presumably a tax on beasts of burden would be equally so, if it operated in fact as a tax on imports.
Mr. Litton states that the question of the liability of cotton cloth woven in Yünnan from Bombay yarns to pay consumption tax is one of great importance. I see no loophole in the 8th section of the VIIIth Article of the Treaty for its escape from this tax.
I have, however, given Mr. Litton no instructions either on this or on the other points he raises, but have informed him that I am referring his question to your Lordship.
I have, &c.
(Signed) WALTER TOWNLEY.
(No. 17.)
Sir,
Inclosure 1 in No. 1.
Acting Consul Litton to Mr. Townley.
Yunnan-fu, November 6, 1902.
I BEG permission to submit for consideration certain points respecting the future application of the new Mackay Treaty to the special circumstances of Yünnan.
1. Article VIII, section 2.-The same amount of surtax is to be levied on goods imported across the land frontiers as on goods entering China by sea.
The surtax (Article VIII, Preamble, paragraph 3) is not to exceed the equivalent...
[1880 b-2]