[This Document is the Property of His Britannic Majesty's Government.]
AFFAIRS OF CHINA.
CONFIDENTIAL.
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621
[November 24.]
SECTION 4.
7 JAN #
11
No. I.
(No. 404.) Sir,
Mr. Max Müller to Sir Edward Grey.-(Received November 24.)
Peking, November 8, 1910, IN my despatch No. 286 of the 20th August I reported that I had instructed His Majesty's consul-general at Yunnan-fu to formally protest against the trade mart regulations issued by the local authorities, and, if he and his French colleague considered it advisable, to urge the amendinent of such clauses as appeared to be most open to objection.
I have the honour to transmit herewith the copies of two despatches in which Mr. O'Brien-Butler reports the action taken by him. The result is what might have been expected, and the Chinese authorities have merely taken the opportunity of affording another demonstration of their prejudice to extending the privileges enjoyed by foreigners in China. But the situation is at least clear. The trade mart is a delusion, and, for all practical purposes, Yunnan-fu remains as closed as ever to foreign trade.
This appears to be conclusively proved by the letter of the 17th October from the Administrator of Foreign Affairs to His Majesty's consul-general. I had supposed that the establishment of the trade mart simplified an intention to afford to foreign goods imported into that area the usual facilities granted in the treaty ports, but Mr. O'Brien- Butler has explained in a subsequent despatch that no distinction is made between the trade mart area and the city of Yunnan-fu and surrounding country, and that transit dues or li-kin as well as full import duty have to be paid on all goods whatsoever brought to Yünnan-fu, whether deposited in the trade mart area or conveyed to any other part of the city.
You are no doubt" aware that the foreign trade of Yunnan-fu, so far as British interests are concerned, is entirely with Iong Kong, and is in the hands of Chinese merchants at Mengtse and Yunnan-fu, with representatives at Hong Kong. If the city were opened as a treaty port, and British goods were thus freed from the 23 per cent, surtax, a solid advantage would be gained, The trade mart confers none, and, in my opinion, must be regarded in the light of an assertion of China's sovereign rights and a tentative encroachment on extra-territoriality.
In the circumstances, I consider it would serve no useful purpose for Mr. O'Brien- Butler to continue the discussion with the local authorities, and, whilst approving his verbal and written representations, I have so informed him. The principles for which we contend have been upheld by the protest, and I am of opinion that it is both unnecessary and undesirable to do anything further at present.
I have, &c.
W. G. MAX MÜLLER.
Enclosure 1 in No. 1.
(No. 35.) Sir,
Consul-General O'Brien-Butler to Mr. Max Müller.
Yünnon-fu, October 10, 1910. I HAVE the honour to report that on receipt of your despatch No. 9 of the 20th August, instructing me to protest against the Yunnan-fu trade mart regulations, I had a long conversation on the subject with Mr. Wilden, and came to the conclusion that my best course was to draw up my protest in writing against the regulations in as general terms as possible, and to point out their most objectionable features in a personal interview with the Administrator of Foreign Affairs. I accordingly sent Mr. Shih a despatch, copy of which is enclosed, stating merely that you found the regulations quite unacceptable as they stood, and had instructed me to protest against them, and at a subsequent interview with that gentleman I discussed those regulations which are indicated in your despatch to Sir Edward Grey of the 20th August as being the most objectionable. At the same time, I took care to let him understand that
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