5
the Hong Kong and Shanghai Banking Corporation, which is one of the most powerful banking institutions in the world. This bank, besides its immense business in exchange and in financing trade, has been connected with almost all the principal Government and railway loans in China. It is associated with Messrs. Jardine, Matheson and Co. in the British and Chinese Corporation for railway construction, and it is the leading bank in the British loan consortium group. In 1919 this bank distributed net profits to the amount of $10,000,000, or nearly £2,000,000 at the rate then current. The Hong Kong and Shanghai Bank and the Chartered Bank issue a currency of bank notes. The Mercantile Bank of India has branches at Hong Kong and Shanghai (see also Appendix VIII).
British insurance companies are well represented by branches and agencies in the China ports; and the following British firms have developed out of our trade with China-Union Insurance Society of Canton (Limited), North China Insurance Company, Yangtsze Insurance Association (Limited), China Mutual Life Insurance Company, Canton Insurance Office (Limited). China Fire Insurance Company (Limited).
X-Boxer Indemnity.
was
Out of an original total of £67.500.000, Great Britain's share was £7,593,081, Including interest, the balance due to Great Britain in May 1921 £9,740,600 9s. 2d. Payment should be completed in 1945.
XI.-Loans.
Reference to Appendix IX will show that Great Britain is interested solely or jointly in about £21.956,500 of China's war indemnity debt, in about £30.185,000 of the railway debt and in about £32.858.336 of the general debt. These sums cover a large proportion (between one-half and three-quarters) of the total foreign indebtedness of China.
XII. Railways.
יי
י !
-
The China Annual Report of 1919 states: Our position in the railway question is a very strong one," Appendix IV shows that out of 6,835 miles of railway operating in China, Great Britain has financed and constructed 825 miles; and is financially interested in 1,958 miles more. Furthermore, we hold concessions or are in course of negotiations for a further 2.500 miles. The report quoted above states:-
If the London market is not disposed to make an effort to finance these projects a solution will have to be found, and found soon, by putting into practice the much-talked-of principle of Anglo-American co-operation. The British and American policy in China is one and the same, and though our manufacturers of railway material will be the losers in a field which was practically their own under our loan agreements, it is not reasonable (nor ultimately sound from the point of view of British interests) that a bankrupt Europe should retard the development of China when American capital could be obtained. China has suffered enough in the past from the political manoeuvres of the Powers, and so, incidentally, has British trade
Unless
the consortium can come into action quickly, it would be better to abandon its concerted aims, and to allow our financial interests to make a completely new start with the Americans alone. Even the addition of the French would prove a complication. Not more than two or three Powers can profitably be associated in railway construction in China. A larger number results in much interesting discussion in London or Paris and an immense telegraphic corre- spondence, but seldom or never in any advance of railway construction. British trade requires at least 20.000 miles of railway within the next few years and is not disposed to wait indefinitely for the formation of an unwieldy and probably unworkable consortium to obtain its object."
XIII-Industrial Concerns,
Appendix I gives a list of British industrial concerns in Hong Kong and China, of which twenty-eight are in Hong Kong, thirty-seven in Shanghai, twenty-five in Tientsin, ten in Hankow, and twenty-three in other cities. The dockyards, sugar refineries, cement works, rope works and works of public utility (gas, electricity, light, tramways, waterworks, &c.) at Hong Kong are a valuable asset to the British
As is
position in China, and a model for the Chinese to emulate. So are the cotton mills in Shanghai, of which British interests control five and Japanese five. only right and natural, our principal competitors in the development of China's industries will be the Chinese themselves. They already own thirty-five cotton mills in China, and have seventeen new mills in course of erection. Rice mills, bean mills, flour mills and silk factories are almost all in Chinese hands. The principal iron foundries are either Japanese-owned (as Penhsifu and Anshantien in Manchuria) or Japanese-controlled (as the Hanyehping Works at Hankow). British companies ewn two important shipbuilding works in Shanghai; and British industrial enter- prise in China should be capable of expansion, especially in the direction of joint Sino-British enterprises.
XIV.-Wireless.
The British Marconi Company last year signed a series of three agreements with the Chinese Government: (1) to supply the Chinese War Office with wireless telephones for ten years: (2) to erect a chain of wireless stations between Peking and Kashgar, with a loan of £600,000; (3) to form a Sino-British ** National Wireless Telegraph Company" for a factory for wireless apparatus. with exclusive rights for twenty years."
XV.-Ariation.
Six large passenger-carrying machines and two avros have been purchased by the Chinese Government from the Handley Page Company, and a contract has been signed with Messrs. Vickers for the supply of one hundred Vickers-Vimy aeroplanes (with a loan of £1,800.000). A British Royal Air Force officer has been engaged as aviation adviser to the Chinese Government.
XVI.-Cables.
The Eastern Extension, Australasia and China Telegraph Company (British) is one of the principal cable companies operating in China. Its rival and associate is the Great Northern Telegraph Company (Danish), with which it shares a special concession from the Chinese Government; and the line of the Commercial Pacific Company (American) touches China at Shanghai. There is a Dutch-German cable from Shanghai to Yap (Deutsch-Nederlandisch-Telegraphen Gesellschaft), whose future has not yet been disposed of. The chief line to Japan (Shanghai-Nagasaki) is controlled by the Danish Company, but the Japanese Government have the right to lay another line of their own. The Japanese own a cable between Sasebo (Japan) and Dairen, and between Dairen and Chefoo. The German cables. Tsingtao to Chefoo and Tsingtao to Shanghai, were transferred to Japan by the Treaty of Versailles. Article 156.
XVII-Mining.
Of the 12,700,000 tons of coal produced in China in 1920, the following were produced by Sino-British firms (estimated output) :-
Kailan Mining Administration (Chibli) . Peking Syndicate (Honan)
Tons.
4,100.000 600,000
4,700,000
The other principal modern coal mines are the Japanese-owned or Japanese- controlled mines in Manchuria, Shantung and Kiangsi, which in 1920 produced 4,060,000 tons. The Kailan Administration has concluded an agreement for exploitation of the Tatung coalfields in North Shansi; and is negotiating for an iron concession in the Yangtsze Valley. The principal iron mines (Manchuria and the Hanyelping deposits) are controlled by the Japanese. British and American com- panies are negotiating for gold concessions (co-operative), and an American company has concluded a preliminary agreement for the exploitation of mineral resources in
Yunnan.
This right is being contested by the United States Government on the ground that it constitutes a monopoly, and conflicts with the doctrine of the Open Door.
716