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The growth of yarn imports is truly remarkable. This reached a total of £2,091,000 in 1929 in spite of a drop in the average value of the tael from 2/11% in 1928 to 2/7 in 1929.
The exports of woollen and worsted yarns from Great Britain to China rose from 2,139,000 lb. in 1924 to 5,741,435 lb. in 1929, and the exports to Hongkong rose in the same period from 298,600 lb. to 670,627 lb. These figures reveal an apparently gratifying growth in the British wool yarn exports to China. A highly un- satisfactory feature of the position is revealed, however, by a more careful analysis of the Chinese import returns. It will be seen from Table XIV of the Wool Appendix that, whereas Great Britain had 67.6 per cent. of the trade (by volume) in 1923, there was a steady fall in Great Britain's share to 39.2 per cent. in 1928. There was a sharp rise again to 48.3 per cent. in 1929, but it is a moot point whether this rise, coincidental with the fall of Belgium's share from 11.9 per cent. to 2.2. per cent. at the same time, was due to a revulsion against the use of the continental dry spun yarns in certain directions, or to the disappearance from the market of a certain very large European supplier.
The Chinese import returns for 1930 will not be available for some months, but in the eleven months to November 30th, about 54 per cent. of the wool yarn imports into Shanghai only, came from Great Britain.
196. It will be seen from Tables XIII and XIV of Appendix B that Germany is Great Britain's chief competitor. In 1913
Germany had 37.5 per cent. of the trade and only 2.5 per cent. in 1920. but her share had risen to 37.4 per cent. in 1929, or practically to her pre-war percentage.
Shanghai is the chief market for wool yarns. According to the report of the Shanghai Chamber of Commerce, the Shanghai market has a consumption of 5,000,000 to 9,000,000 lb. per annum, whereas the four other centres of distribution, Hongkong, Tientsin, Mukden, and Harbin, account for approximately 400,000 to 600,000 lb. each per year.
197. The report of the Shanghai Chamber of Commerce divides the yarns imported into Shanghai into four classes; hand-knitting, zephyrs, hosieries, and woollen yarn for fleece cloth. The hand- knittings account for about half the total. They are mostly of low or medium qualities, and rauge in counts from 5's to 10's, worsted in four-fold and six-fold. Although termed hand-knitting," much of the yarn is made up on circular hand-driven machines into such garments as heavy cardigans and headwear. The zephyr yarns consist of to English counts, in low qualities, and amount to approximately 500,000 lb. per annum, nearly all of German manufacture. The bulk of the hosiery yarns are of 44 inch quality and range in counts from to with similar counts in singles on cones, used for doubling with cotton. The hosiery yarns account for about 40 per cent. of the total, and
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Great Britain has a large proportion of the trade. Woollen yarns for fleece cloth, &c., are imported to the extent of 800,000 or 1,000,000 lb. per annum, and practically the whole of this comes from Great Britain.
There is a small trade in soft twisted weaving yarns in counts from 2/60 m.m. to 2/72 m.m. These yarns, which come chiefly from Poland, are knitted into light fabrics.
In Manchuria we found evidence of Japanese competition at very low prices in the hosiery yarn trade.
198. The method of distribution of the imports is the same for British and for Continental yarns. The bulk of the yarn is bought by the European importing houses from British spinners or yarn merchants, many of whom have their own representatives or agents permanently stationed in Shanghai. Very little yarn is sold direct by the exporter to the Chinese.
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The importing house in Shanghai sells the yarn to the local factory or to the native dealers who are nearly all situated in one street or Wool Alley." The distribution of the yarn into the interior is in the hands of natives who buy from the Shanghai dealers. All yarn dealers are formed into a guild for the exchange of information and general co-operation as to policy. Informa- tion as to price changes and all other matters is disseminated very rapidly amongst them.
Sales to the local dealers in Shanghai are made in sterling, whereas in other markets they are in local currency. The method of selling in sterling in Shanghai has been a source of great trouble in the last few years, as the native dealers, following the inborn gambling instinct of the Chinese, have failed to cover the exchange at the time the contracts were made. When falls in exchange have occurred, they have, in many cases, declined to take up their contracts with the importers, or have only agreed to do so, following considerable allowances made by the importers. The result has been that both importers and dealers have lost large amounts of money. The importers now stipulate that at least 50 per cent. of the exchange shall be covered at the time the yarn order is given.
199. As regards the immediate outlook for the yarn trade, it is difficult to form any definite opinion, owing (1) to the deprecia- tion of the Chinese currency resulting from the fall in the value of silver, and (2) the general political uncertainty and the dis- turbed condition of the interior. Taking the long view, however, it seems reasonably certain that the Chinese market for woollen and worsted yarns will steadily expand in the future.
WOOLLEN AND WORSTED CLOTH.
200. There is no wool cloth industry in China to speak of; the few mills are small, and their output is insignificant. They are engaged either in spinning yarn for the carpet trade, or in the
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