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The Chinese Government will, as stated above, resent
any agreement made between us and Japan for distributing
appointments in the Chinese customs service and the
Japanese representatives at Nanking may well present
the proposals in such a form as to foment friction. I
an inclined to think that we and the Japanese should each
approach the Chinese Government separately, with our agreed
requests, but in the first instance, the method of approach
to the Chinese Government should be discussed with the
Japanese Foreign Office at Tokyo.
(4)
Customs Tariff.
unfortunately
The Chinese Customs tariff has been increased in
recent years, particularly as regards textiles, to a
prohibitive point. The Japanese have frequently
protested against these tariff increases;
they have linked their demands on this point up with
the question of smuggling and have urged sweeping
reductions of the tariff so as to make snuggling un-
profitable. This is not a practicable proposal as
the native industries of China need a considerable
measure of protection against Japanese goods. But I
believe that a careful revision of the Chinese tariff
could be undertaken which would give some satisfaction
to the Japanese demands, help our trade and increase the
Customs revenues on which Chinese financial stability
largely depends: and I think that we should continue
to press the Chinese Government to undertake such a
revision.
(5)
Export creàits.
The main opening in China for British exports,
in present conditions, lies in the supply of capital
goods and particularly machinery for power plants and
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