-3-
Extract from the South China Morning Post of 24th. February, 1930
48
in the form of Government works such as new roads and bridges. This fundamental improvement in the economic state of the Islands reflects itself in the budget sunplus which the year is expected to produce.
Next year's outlook for trade be- tween Great Britain and the Far East
generally is somewhat overcast. The heavy fall in values consequent on the Wall Street collapse and inflated money conditions are without doubt affecting manufacturers and restrict- ing their purchases of raw material. This will bear heavily on firms hand- ling Far Eastern produce such as rubber, tin, hemp, sugar and China produce generally, making it difficult to market the steadily increasing pro- duction.
ex-
Unfortunately, British textile porters generally have been corres- pondingly hit. Handicapped by high cost of production, they are condemned to see the market supplied by the cheaper products of Japanese mills and of domestic output in India and the Far East. The drop in silver currencies has also adversely affected the demand for British manufactures, especially cotton, woollen and artifi- cial silk fabrics, and it is to be feared that the marked falling-off in British exports to the East, dating from last October, may yet continue.
To take the reverse side of the picture, cheaper money and a saner perspective as to the limits of trade expansion may lead to business being, in future conducted on sounder econo- mic lines. We may venture, too, on the hope that an increased trade activity in other parts of the world will counteract the feared decline in America's prosperity and so prevent a lessening of the world's demand for commodities.
The Year in China. Let us pass
now to the political situation in China which, more than any other factor in the present state of affairs, regulates the fortunes of those whose business lies in the Far East.
of the
Fresh Breach of Peace. In the meantime at Nanking an important political milestone had been passed, namely the holding Third National Congress of the Kuomintang. The result of the Con- gress was to confirm the central power. in the hands of Marshal Chiang Kai- membership of the Central Executive shek and his colleagues, leaving the Council, the supreme authority in the country, substantially unchanged.
Before the country had had time to settle down from the Wuhan revolt, a fresh breach of the peace occurred. In the middle of May,
Marshal Feng Yu-hsiang, at the head of the Kuominchun, challenged the Nanking Government, withdrawing his army into the western provinces and destroying railways along his
line of retreat.
He was officially declared a rebel and by the end of the month war was again raging in China. The state funeral of Dr. Sun Yat-sen-which took place with great ceremony on June 1st-came at an
opportune moment and caused fighting. Thereafter Marshal Feng, a lull in the weakened by the defection of two of his leading generals, withdrew from active revolt but his attitude to the Government continued to be such as to leave the situation precarious. A bold effort to reunite the leaders was made by Chiang Kai-shek in the first week of July when he called a con- ference at Peking. The attempt was partially successful; Marshal Feng again pledged his loyalty and was reinstated and it was agreed to hold another Disbandment Conference.
Con-
of a further
This second Disbandment ference, held at Nanking early' in August, ended in fresh plan for an all-round reduction of troops and in the issue by Nanking disbandment loan. The results were, unfortunately, negative, for after barely three months of peace, war broke out for the third time towards the end of September.
On this occasion Nanking was faced
The year has witnessed slow pro- by gress in the movement
a revolt from the solidation.
towards con- "Reorganisationists," a group mainly A series counter-movements have threatened the left who had been excluded from of important consisting of the political leaders of the stability of the Government and office, supported by certain military the peace and security of the popula- commanders including several of the tion. None of these has succeeded, Kuominchun generals. indeed, in over-throwing the Govern- ment of Nanking and so far, at any rate, there is no evidence of any al- ternative to that Government. These repeated uprisings absorbed, how ever, most of the country's energies
and the record of the year, which I will attempt to summarize in a short space, is, as will be seen, chiefly taken up by military operation.
a
i
review
gress. Such as they are, I attempt, however, to achievements of the year.
Nanking's Reforms.
will the
In the sphere, firstly, of politics, the Central Executive Council an- nounced in June the Kuomintang programme for the continued govern- with this programme, the system of ment of the country. In accordance "political tutelage" is to last till 1935, thus prolonging the government of China by the Kuomin Party for six years to come.
In the matter of legislation many new laws and sections of codes have
ex-
been promulgated. The texts appear to be based, in general, on good and up-to-date models. Our own perience in legislature has taught us, however, the great value of indepen- dent scrutiny and criticism of draft laws in order that they may, before acceptance, be moulded into the form best adapted to local conditions and the present system of legislature in it is perhaps a little unfortunate that
China provides no opportunity for examination by any other agency than the manner of their making, the new the Central Administration itself. In fundamental laws of China might too much to departmental regulations. appear, in fact, to approximate rather
Turning to national finance, the position is frankly disappointing. In spite of forcible pleadings by the Chinese bankers and merchants and of clear and outspoken warnings by Government have failed to the Minister of Finance himself, the achieve any of the major reforms which are so urgently needed in order to put the country on a sound financial foot- ing.
The balancing of revenue and ex- penditure appears no nearer and the spending of the major part of the national income on military expendi- little or no abatement of the crippling ture continues as before. There is
local taxation.
made
The reorganisation of the Central Government's revenues under Mr. T. V. Soong has undoubtedly so-called
advance, but the ensuing increase, in- cluding the additional yield from the Customs, has been swallowed up almost entirely by military needs. Future income, meanwhile, has been pledged ever deeper for unproductive loans For many weeks fighting proceeded At first the rebels were successful
issued to the total nominal value of some in the central and
$250 millions in the course vinces, and the war was at one moment
of the past year. I
must mention in this respect the great im- carried almost to the gates of Nank-provement effected by the creation of favour of Marshal Chiang, who, by tody and service of the funds pledged ing. The tide turned, however, in independent commissions for the cus- the end of the year, had the situation for these loans, the result showing in again in hand and averted the threat the fact that their price on the market has remained relatively unaffected by political fluctuations.
to the Government,
southern
pro-
Three Crises Survived. One can thus
congratulate the
The year opened with the Disband- ment Conference in session at Nan- king. The hopes which attended this first
Alarm Over Debts. "round table" of the military Government on surviving three must chiefs were however doomed
Though a special Government Com- to be serious crises during the course of mittee has been appointed for debt short-lived. Within a
Whether couple of the year. months,
in consequence consolidation, we still await tangible and before
has start its position had
been strengthened evidence of progress and in the mean- been made to apply Conference plans for demobilisa-
the throughout the country as a whole it time the debts continue to "snowball" is very difficult to say. A year ago in alarming fashion. The Minister of tinn, the country had slipped back it was at least possible to hope that Finance's arrangements for dealing to a state of civil strife.
the nationalist victory had done away with the arrears of the "Salt" loans
the the with
old disruptive which kept China in
forces has helped to revive confidence among turmoil. The holders of this class of security. at Hankow. events of the last twelve months: Nothing however has been done for a have proved this hope to be vain and very important category of creditors, we must, I fear, now reconcile our- namely the
purveyors of railway selves to a slower, and less dramatic, material, some of whom have been cure of China's domestic ills.
waiting for payment for over ten years. This is a very serious matter and I consider it indefensible that a government which disposes of the earnings of railways should withhold payment for the materials used in
A quarrel arose between Central Government and the Wuhan, military group centred By the end of March, it had flared into active warfare-the first renewal of fighting since the establishment of the National Government. The revolt was
quelled on the Yangtze before the end of April, but fighting
The sequence of wars has left little room for constructive work and the dragged on in the southern provinces, many excellent programmes of re- especially round Canton, into the form sponsored by the National month of June.
Government have made but small pro-