10 -
care any evidence which may be offered to prove that
any given taxation is "in fact" imposed on and paid
by Chinese citizens" anywhere in China. Efforts
will be made to exploit the proposed agreement for
taxation: In particular it seems not unlikely that
attempts would be made on fiscal grounds to impose
upon British Companies operating in China such a
system of interference as will compel their
dissolution in favour of rival Chinese concerns.
It is important that British companies should be pro-
tected against unfair and inequitable interference
by Chinese officials acting under the alleged
authority of Chinese Company law. It is also
important in any treaty revision that the question
of the taxation to which British trade and British
Nationals may be subjected shall be clearly defined..
The meaning of "regular and legal Chinese taxation"
must therefore be made clear, and British nationals
must know what redress will be open to them, if they
and their trade are subjected to illegal taxation.
The position which "local" taxation will occupy and
the extent to which British nationals may be sub-
jected to "local" taxes, varying in different parts
of China, must be clearly determined.
5. "His Majesty's Government are prepared, as
soon as the revised Chinese penal code is promulgated
and applied in Chinese Courts, to consider its
application in British Courts in China."
We
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