25
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the activities of private enterprise and to the fact that certain special types of machinery have been partially salved from the factories in the east. Such machinery is often incomplete and not suitable for the most urgent kinds of production. Nevertheless a great deal of time and energy is spent in its repair and erection simply because it happens to be there. It would be far better to utilise the same resources for the manufacture of new and more urgently required productive units.
92. I was particularly anxious to ascertain the quality of the work turned out by skilled Chinese labour and I questioned all the American supervisors at the Lowing factory on this point. They all spoke in terms of the highest praise of their labour corps, and the man in charge of the erection section said that he considered his Chinese staff compared favourably with the Americans he had had under him in the United States of America. I myself checked up the accuracy of some machine tools and gauges that were being made and of some optical work (field-glasses) and in both cases the results were good. The rates of wages paid are, on a foreign exchange basis, exceedingly low, amounting to about 1 dollar a day for unskilled work, up to 3 dollars for skilled work and up to 5 dollars in very exceptional cases.
93. The difficulties that exist at the present time are fourfold: First, the inability to purchase or obtain delivery of machinery from abroad that cannot be made in China; second, the fact that, though thousands of tons of machinery have been brought by water or by road from the cities in the east, often this is incomplete and requires many new parts and a great deal of adjustment before it can be put into operation; third, even if machinery can be delivered to Haiphong or Rangoon, often it cannot be transported from these places owing to the congestion; fourth, the lack of any plan of priorities leads to the wasteful use of the very small resources that exist for the manufacture of machinery upon It things that are not vital while more vital matters cannot be attended to. would be of great assistance in overcoming many of these difficulties if the Advisory and Planning Committee suggested (see Foreign Relations section) could be put into operation, and whole-hearted British co-operation in this would undoubtedly assist in the rehabilitation of British influence in China. To make this a success would entail the release for special service in China of some half- dozen British experts and also the release of certain specialities in machinery for export to China from Great Britain. This latter question is an important one. I am well aware of the difficulties in certain cases, but I am sure that, if the political value of such action could be fully realised, a great deal more could be done to facilitate exports to China without in any way jeopardising the situation at home. The political aspect is important, as this is one of the matters upon which the Chinese feel strongly, though they fully understand that, as regards certain special types of machinery, there may be difficulties. As a rule, however, the quantities that are to them vital are almost negligible compared to British requirements. Some of this machinery might be second-hand material which is too out-of-date for use in Great Britain but would adequately serve the purpose of the Chinese. Provision should also be made to assist the transport of such machinery through Burma.
Apart from the organised attempt by the Chinese Government to set up new industries, either themselves or in association with private capitalists, there is, of course, a very large volume of handicraft industries of all kinds. These principally cater for the every-day requirements of the people along traditional lines, and their only practical connexion with the new industrialisa- tion is through the manufacture of pig-iron and the mining of coal.
95. A good deal of work has already been completed upon the investigation of the natural resources of Western China, and valuable minerals have been proved in a number of areas, though many of these are too remote from transport facilities to render them workable. A few large-scale coal-mines have been opened up, and this development is continuing. There exist very large coal reserves, some of good quality and in seams of great thickness. Certain of the rarer metals like tungsten and molybdenum are available in considerable quantities, as also is gold, though at present the workings for the latter metal are only of an elementary kind. Copper, silver, lead, tin, zinc, antimony and other metals are also found, and of these copper, silver and tin are being worked to an appreciable extent. There is no doubt that Western China is a rich mineral and agricultural area, and that the effect of the present conditions must be to open up this wealth
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