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C.O.
This Document is the Property of His Britannic Majesty's Government 17950
141 Rece
[B]
AFFAIRS OF CHINA.
CONFIDENTIAL.
(12775]
No. 1.
REGP 24 APR 09
[April 5.]
SECTION 1.
(No. 123.) Sir,
Sir E. Goschen to Sir Edward Grey.-(Received April 5.)
Berlin, April 2, 1909.
I HAVE the honour to report that a Chinese Special Mission arrived in Berlin on the 31st March, under the Minister, Tong Shao-yi, and the Director of Chinese Railways, Mun-yen-Chung.
In connection with the arrival of the Mission an article has appeared in the "Berliner Tageblatt" of to-day, entitled "The Great Powers and China," of which I have the honour to inclose a translation by Mr. Sampson.
An editorial note explains that this article furnishes the key to the customs negotiations pending between China and the Great Powers, which will probably form the subject of discussion between the Chinese Special Envoy and the Berlin officials.
I have, &c. (Signed) W. E. GOSCHEN,
Inclosure in No. 2.
Article extracted from the "Berliner Tageblatt" of April 2, by Adolph von Flöckher, entitled, "The Great Powers and China."
(Translation.)
ENGLAND was the first Power to take advantage of the right granted by the Peking Protocol of 1901 to demand a revision of the old Treaties; and this was due to the pressure of her merchants in the Far East, who demanded that the Chinese market, which had been greatly endangered by Japanese competition, should be secured by new Agreements. The British Government did not charge their Diplomatic or Consular Representatives with these negotiations, but put them in the hands of a merchant, who also concluded the Treaty with the Chinese Government.
Sir James Lyle Mackay, who for many years had been a merchant in India and a member of the Indian Council, was sent to Shanghae in 1902 to negotiate for a Treaty. He arrived in great state with the rank of Envoy Extraordinary, and was soon able to conclude negotiations for a Treaty, which was signed on the 5th September, 1902. It may be observed by the way that the Treaty is for the present not valid, and will not come into force until all the Signatory Powers of the peace of Peking have adhered to it, and that in Germany great misgivings are felt concerning it, as it does not sufficiently protect our interests.
The increase of the import duties from 5 to 12 per cent. and of the export duties from 5 to 7 per cent. ad valorem appears justified; but, on the other hand, the promise of the Chinese Government to abolish the interior duties, known as li-kin, does not appear to be sufficiently guaranteed to make it certain that they will actually be abolished. The railways have indeed made a great breach in the system of levying li-kin, as the goods are by this means forwarded in through trains, thus avoiding the pernicious system, whereas under the ordinary means of transport the goods are taxed as many as eighty times before arriving at their destination.
Germany, in virtue of Article 24 of the Commercial Treaty of 1861, is able to avoid the payment of li-kin on all goods imported into a Chinese town by rail; and merchandize, after paying the import duty, is only subject to a further transit tax of 24 per cent., so that, for instance, goods sent to Hankow via Shanghae pay a total duty of 7 per cent, ad valorem.
It would therefore appear at first sight that Germany has no very great interest in the abolition of li-kin. But it must be considered that the railways are of comparatively small extent, and that also above all the Chinese exports suffer from
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