CO882-6

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

Shanghai, and strengthen her political position there. During the first 50 years of British trade with China, that trade was distributed and scattered all over some 20 odd small Treaty Ports. All this has now changed, and very many of the larger British firms at these out Treaty Ports have closed their business there, and for greater convenience of trade have migrated to Shanghai. The present tendency of the British trade in China to-day is to focus and centre at Hong Kong and Shanghai, and to become big commission agencies, buying and selling for the Chinese traders in up-country and smaller out Treaty Ports. Shanghai in particular is rapidly becoming the focus and hub, not only of foreign and Chinese commerce, but also of that great political influence which follows this trade in Chim.

The Chinese trade of the eight Yang Tsze provinces (comprising an area of 600,000 square miles, with a population of over 150,000,000, is one of the richest in the world. The tea, sugar, tobacco, opium poppy, rice, cotton, and silk produced there is unsurpassed, and the coal, mineral, and timber resources of the country as yet undeveloped are immense.

The value of the foreign trade with the whole Yang Teze basin is approximately 35,000,000l. a year.

Nearly two thirds of the whole foreign trade of the world with China is conducted with the Yang Taze basin and the provinces the river drains in the north. Of all the carrying trade in China, Great Britain owns 60 per cent. or more, and of that total fully 35 per cent. is concentrated on carrying goods from the Yang Taze Valley.

With the expansion of trade, development of the mines, extension of railways, and the opening of inland rivers to steamboats, the great emporium of Shanghai must grow apace, and become more and more important as a great commercial and political centre in future.

The nearest British Naval and Military station to all these great British interests is Hong-Kong, and it must be difficult to operate from such a distant base, especially if one bears in mind that the Yang Tsze is the second largest river in the world, and that it is navigable for Atlantic liners some 600 miles up to Hankow, and that the tributaries and lakes of the Yang Taze Extensive are also navigable for another 1,000 miles for smaller steamers. operations, therefore, up the Yang Taze reaches for 600 miles or more, would, it appears, only be possible from some such base as Chusan, at the mouth of the great river. Presuming even that it were possible to fortify Wei-hai-Wei, that station would still be just as inconveniently distant from Shanghai in the north as Hong Kong Harbour is in the south.

Geographically speaking, it cannot be denied that the situation of Chusan, After its occupation, with the Ting Hai harbour is a very commanding one. Great Britain would control the two great river basins of Southern and Central China, whose interests are now all being focussed in the British Colony of Hong Kong and in the cosmopolitan emporium of Shanghai. It must not be forgotten, too, that British trade in the centre and south of China is far more valuable than that in the north. The interests of British trade in North China are effectually guarded by treaty, and are specially protected by the juxtaposition of Wei-hai-Wei and by the Anglo-Japanese Alliance. It is submitted, however, that the interests of Great Britain at Shanghai might still receive greater attention from His Majesty's Government than at present. Further, the exchange of Wei-hai-Wei and the occupation of Chusan should be made now if at all.

Fifty or seventy years hence Shanghai will have grown to such a pitch of commercial greatness and political importance that "the craven fear of being great," or some other political reason, might make Great Britain shrink and hesitate to do then what might be done now with the consent of the Chinese Government, and without causing offence and exasperation to foreign Powers. In the third place, the occupation of Chusan would put Great Britain in a strong position to exercise great political influence over the Governors-General and Governors of the eight great provinces of Sz-Chuan, Hupel, Hunan, Kiangai, Ngan Hui, Kiang Su, Honan, and Che Kiang.

From Wet-hai-Wei it is impossible to exercise any such influence over any important part of China. The future development of China depends upon the stearly advance of education in Western arts of war, in pure science, and other mechanical industries. This reform and progress is certain to come,

but slowly, and it will come from the enlightened south and from the progressive provinces of China in the Yang Tase Valley, not from the reactionary north.

It must be remembered that the millions of Chinese are governed entirely on Home Rule principles, and that the great Provincial satraps in these States are practically just as independent of the Central Government as the self-governing States of the American Federation are in their relation to the Supreme Federal Power at Washington.

The acquisition, therefore, of Chusan would make the influence and prestige of Great Britain predominant at the capitals of the leading Yang Teze Viceroys at Nang King, Wuchang, Cheng Tu. This would be a great assistance to all trade, as the successful carrying out of commercial measures rests almost entirely with the provincial authorities. The political influence that Great Britain would thus be able to establish in Central China might well be directed to move the Chinese there to learn to rely on British support against the bigotry of the anti-foreign Manchus and Russian pressure at Peking. The friendlier and stronger Great Britain's relations with the high officials of the Yang Taze provinces, the easier will be progress and reform, the greater the security for all foreign trade, and the safer all foreign capital invested in China.

In the fourth place, it must not be forgotten that Chuaan has already been twice occupied by Great Britain during the Anglo-Chinese and Anglo-French- Chinese wars, some 50 odd years ago, when Shanghai was merely a fishing village. In the Convention made with the Chinese by Sir John Davis, provision is made that the island of Chusan, with the harbour of Ting Hai and the surrounding islands, shall not be ceded by China to any other foreign Power. England, therefore, has historical claims to Chusan which never existed in the case of Wei-hai-Wei.

In the fifth place, the problem of fortifications at Chusan is, it is believed, a comparatively simple one. There is not there any question, as at Wei-hai- Wei, of the hills of the mainland completely commanding the harbour. For garrison purposes at Chusan, the Wei-hai-Wei 1st Chinese Regiment would answer well, and they would be always useful to assist the Yang Tame Viceroys in policing their provinces in emergencies, such as those of the Thaiping rebellion or "Boxer" outbreaks. In such disturbances there would not be the same objection on the part of the Chinese Government to making use of those British-Chinese troops for this purpose as would naturally be made against employing British forces. It would, therefore, seem advisable that any proposal of the War Office to disband the 1st Chinese Regiment should be suspended for the present, pending any decision being come to about Chusan, as it would be expensive and difficult to disband the regiment and then have to recruit and re-form it again. As regards desertions in the lat Chinese Regiment, it may be pointed out that less opportunity for this would exist at Chusan than at Wei-bai-Wei, and that there will be better opportunity in Chusan for establishing the strict military discipline known to be necessary for securing the good conduct of Chinese troops than is possible under the abnormal circumstances that exist in Wei-hai-Wei.

It may be added that the 1st Chinese Regiment has been submitted during the Boxer disturbances to the severest tests, and that their courage and loyalty to their colours has never been questioned, and that in endurance of fatigue and in exhibition of physical strength during the North China campaign they were second to none.

As Eastern people, inured to the rapid changes of a sub-tropical zone, the Chinese Regiment would suit the climate of the Yang Taze better than English troops, and the military expenditure on the regiment should be less by one-half than what it would cost the country for a regiment of English soldiers.

In the event of the proposed exchange being made, to prevent the many mistakes that were made at the taking over of Wei-hai-Wei in 1898, it would be well that the Colonial Office should assume charge of civil affairs from the very first, and send a Civil Commissioner with Chinese experience to assist the Naval and Military authorities in carrying out such administration as might be established.

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