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Provisions of similar nature for Uliassutai, Kobdo, Altai, Ili, Tarbagatai, Hsi Ning, Thibet, and Urga.
Further Regulations will be drawn up for the guidance of the Financial Council and the Provincial Bureaux of Finance,
Any modifications to the present Regulations which may prove necessary will be submitted to the Throne for approval.
[This Document is the Property of His Britannic Majesty's Government). O.
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CHINA TRADE.
CONFIDENTIAL.
[10911]
No. 1.
13949
REC REG? 24 APR 09 [March 22.]
123
SECTION 1.
0
(No. 91.) Sir,
Sir J. Jordan to Sir Edward Grey.-(Received March 22.)
Peking, February 27, 1909. YOUR despatch No. 538 of the 26th November called for information as to the alleged monopoly acquired by German firms in handling orders for ammunition in the Far East, and as the inquiry can scarcely be separated from a general examination of the trade in munitions of war in this country, I called for Reports on the subject from His Majesty's Commercial Attaché and His Majesty's Consuls-General at Tien-tsin, Hankow, and Canton, in order to supplement information already in my possession.
These Reports, of which I have the honour to inclose copies, show that at Tien-tsin, Hankow, and Cauton there are no British firms engaged as agents in the arms and ammunition trade for military purposes, which rests almost entirely in German hands.
One of the explanations of this condition of things is that when the provincial Governments adopted Western army organization they sought not only instructors- but equipment from the greatest military Power, while the patriotic German instructors missed no opportunity of placing business in the hands of their fellow- countrymen.
That the training of the army on the German model would contribute towards favouring Germau manufactures and German agencies is obvious, and this circum- stance might be accepted as a full explanation of the alleged monopoly, if it were not a matter of common knowledge that Chinese armaments are entirely heterogeneous, and comprise the products of Armstrong and Vickers-Maxim, as well as those of Schneider-Creuzot and Krupp.
The monopoly, therefore, is not one of manufacture. British products, and French also, have a share in the market, and it is only in the agency for sale in China that the local German firms have a clear field. Thus Sir W. G. Armstrong, Whitworth, and Co. are represented by the German firm of Buchheister; Messrs. Vickers, Sons, and Maxim by the German firms Telge and Schroeter and Von During, Wibel, and Cc.; Messrs. J. L. Thorneycroft by Von During, Wibel, and Co.; and even the French works of Schneider-Creuzot by a German-Chinese partnership known as Bielfeld and Sun,
The usual explanation as to how the German agencies have ousted all com- petitors is to characterize this trade as a dirty business, involving false invoices and refinements in the art of "squeezing" to which reputable British firms will not lend themselves. The experience of the leading British firm in China, which is touched upon in the inclosed Reports from Tien-tsin and Shanghac, places it beyond doubt that, in the early days of the trade, without bribery and corruption there were no orders, and it is notorious, and in no wise concealed by the German agencies at the present time, that there is still little or no chance of doing Government business without these methods.
But, apart from this feature of the trade, there is another aspect which is creditable to the energy and business aptitude of the firms concerned, namely, their organization of special departments under technical experts who possess a certain knowledge of the Chinese language, and who, through the employment of compradores of good social standing, keep in close touch with the spending Departments and obtain the earliest information of prospective orders.
The contrast between the effective representation on the spot of Krupp, Schneider, and Vickers-Maxim was recently demonstrated in the field-gun trials which took place in December. On that occasion the German and French guns were submitted to a searching trial for seventeen days, and there was no British model ready to compete. I have been able to arrange with Tieh Liang, the Minister of War, that when it eventually arrives it shall be given a trial, and am not without hope that
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