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This Document is the Property of His Britannic Majesty's Government.]
548
AFFAIRS OF CHINA.
CONFIDENTIAL.
[9544]
No. 1.
[March 19.]
SECTION
C. O.
12550 REC
Dear Sir Francis,
Mr. C. S. Addis to Foreign Office.-(Received March 19.)
(Reel 28 APR 10
Hong Kong and Shanghae Bank, 31, Lombard Street, London, March 18, 1910.
I ENCLOSE an extract from Hillier's letter with reference to the recent special enquiry into the revenue and expenditure of the Chinese Empire. The results, as published in the "Peking Gazette" of the 20th February, although admittedly tentative, are most encouraging, and will, I hope, form the first step to a national budget, than which nothing is more to be desired in the general interests of China.
Yours truly,
C. S. ADDIS.
Enclosure 1 in No. 1,
(Extract.)
Mr. Hillier to Mr. C S. Addis.
Peking, February 28, 1910. I ENCLOSE translation of a statement attached to a memorial from the Board of Finance, reporting upon the recent special enquiry into the revenue and expenditure of the provinces. I have not yet had time to make a translation of the memorial itself, which is a long document. It points out that the results of the enquiry, which is the first attempt of its kind, cannot pretend to final and complete accuracy. The figures given are the totals as wired by the various provinces, and are subject to adjustment in the light of the detailed returns to be received later. One obvious source of error is to be found in the fact that grants from the surplus revenues of one province to assist the deficiencies of another appear, in the case of the one, on the side of expenditure, and in that of the other on the side of revenue, so that the amount is duplicated and the apparent revenue increased by the total of such transfers. Apparently, in the absence of detailed returns, they do not know how much these transfers amount to. On the other hand, I think it may be taken for granted that, in reporting to the central Government, the provinces are not likely to overstate their receipts; and, making due allowance for all these points, the figures may probably be taken as a conservative estimate.
The first point which strikes one is that, whereas the revenue of China has in the past been variously estimated at 100,000,000 taels or its neighbourhood, a basis which appears to have been assumed by Bland in his recent articles on the "Indebtedness of China" in the "Times," the amount now reported as the result of actual enquiry is 238,000,000 taels. Deducting from this the sum of 38,000,000 taels for account of Imperial maritime customs collection and the like, the balance of 200,000,000 taels may fairly be taken as representing approximately the total of direct taxation--say, half a tael, or 1s. 3d. per head of the population. The native of India, according to Whittaker, pays 3s. 2d. a-head in direct taxation, but he has to support a standing army costing 20,000,000l. a-year---say, 1 rupce, or 1s. 4d. per head of population. China also has an army, but its cost cannot be anything like that of the Indian army, and 4d. per head of population might probably be considered a fair estimate. Compared, therefore, with the native of India, the native of China presents an additional taxable margin of 11d. per head, and this without taking into consideration the fact that, under the present corrupt system of collection, he is probably squeezed a good deal more than the 1s. 3d, allotted to him on the basis of the reported collection. Turning to China's foreign debt, we find that she pays for interest and amortisation something like 50,000,000 taels a-year--say, one-eighth of a tael, or about 4d. per head of population. Assuming, therefore, that all her present revenue was absorbed by her domestic expenses, China, as compared with India, still offers a taxable margin sufficient to secure three times her present foreign indebtedness.
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