(This Document is the Property of His Britannic Majesty's Government.)
# CHINA TRADE.
## CONFIDENTIAL.
[949]
No. 1.
109
[January 8.]
SECTION K), 4042
Sir E. Satow to the Marquess of Lansdowne.--(Received January 1906)
(No. 378.) My Lord,
Peking, November 13, 1905.
IN my despatch No. 280 of the 7th August I had the honour to transmit translation of the draft of a new Commercial Treaty then being negotiated between Germany and China, which Sir Pelham Warren had derived from a Chinese source.
These negotiations have now been suspended, and Dr. Knappe, the German Commissioner engaged upon them, has left Shanghae for home.
I learn from my German colleague that the Chinese Plenipotentiaries displayed no disposition to accord to Germany any privileges other or greater than what were conceded in the Treaties with Great Britain, Japan, and the United States, and that personally he did not see what advantage was to be gained by concluding a Treaty which was a mere copy of the others. I gather also from him that he was not in favour of giving to China any undertaking with regard to the eventual abolition of Consular jurisdiction, such as is contained in Article XII of the British Treaty of 1902. In view of the way in which the Chinese Board of Commerce, in their Memorandum on trade-mark legislation, forwarded in my despatch No. 352 of the 26th ultimo, have already tried to twist the wording of that Article to their own advantage, I confess that it does not appear to me a matter of regret if other Powers decline to follow our example in this instance.
A well-informed Chinese newspaper has recently thrown some light on the points of difference between the German and Chinese negotiators which have caused the present deadlock. Some of these were mere verbal modifications insisted on by the Chinese, but in Article III the phrase "Germans and German-protected persons ("Schutzgenossen") appears to have acted as a real stumbling-block. Who are German-protected persons? An attempt was made to explain this expression as indicating foreigners of another nationality, who, in consequence of their having no diplomatic or Consular Representative in China, have been, or may be, placed under German protection. The Chinese negotiators doubtless thought that Chinese inhabitants of the leased territory of Kiao-chou might be intended to come within this category, while it no doubt covers the natives of German Colonies or Protectorates, who cannot be held to be Germans in the strict acceptance of the word. In any case, "Schutzgenossen" must have appeared to them as a suspicious innovation, as the Treaty of 1861 between the German Zollverein and China mentions only "sujets des Etats Allemands Contractants," and in the supplementary Convention of 1880 the term used is "German subjects."
The principal objection of the Chinese negotiators was doubtless Article I, the draft of which runs as follows:----
"The Chinese Government having, in Treaties with the Governments of Great Britain and Ireland, the United States of America, Japan, and Portugal, provided for the abolition of the system of taxation at present existing under the name of li-kin in return for the increase of the import and export duties, whilst the coming into force of these stipulations has been made dependent on their acceptation by all the Treaty Powers, it will be necessary to settle this question by an International Agreement. The German Government declares itself ready to take part in this settlement, which, in particular, must insure the complete abolition of li-kin on the part of China." (Translation from the German text.)
At first sight it might appear that a proposal to submit the li-kin question to a Conference of the Powers was only calculated to delay still further the solution of this question, which has been the cause of so many disputes and discussions in the past. It must, however, not be forgotten that the execution of Article VIII of the Mackay Treaty, elaborately providing for the abolition of li-kin in return for a surtax upon imports and exports, depends entirely upon the good faith of China, and I regret to say that the conduct of the Chinese Government, and especially of the provincial authorities...
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