CO129-440 - Others & Individuals - 1916 — Page 89

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required by the various consuming areas. Under the present system the average importer in Shanghai, once the goods have left his hands, takes very little further interest in their ultimate disposal, and, beyond a general knowledge that certain goods are taken by certain provinces, is almost completely in the dark as to the conditions in those districts where they are distributed.

Any such scheme of distribution as has been suggested would require to be carried out either by large merchant houses or manufacturers with consider- able sums at their disposal in order to be able to carry out the whole scheme in its entirety, and so effect the fullest economies, and avoid the risks and pitfalls attending half-hearted attempts. The company should be strong enough to judge of the success of the system by carrying it out for a full trade cycle of five years or so, and be prepared to devote a considerable amount of courageous, patient and painstaking effort for the future. It is evident that it would be easier for a new undertaking to carry out a system of this kind than for one of the old merchant houses who are so closely bound by their existing Chinese connections in the ports, but the change might be effected by degrees, and at all events it must be recognised that the present system cannot be regarded as satisfactory, and requires a complete revision. Conditions in the China import trade are tending more and more towards centralisation in the hands of a few powerful firms who are in a position to import the goods and sell them on their own account. The day of the small merchant importing for Chinese dealers on a commission basis is past, and the market requires to be handled with the same care, energy and foresight and improved methods as European markets are handled. The conditions affecting any scheme for expansion in the hinterland are rapidly improving, and many of the largest cities in the interior can now be reached by rail; great provinces such as Szechuan are being opened up and brought within comparatively easy reach of the coast by steam navigation, and currency conditions in the provinces are being put on a much more satisfactory basis. The postal and telegraph system connects with every town of note in the country, with such modern methods as parcel and sample post,

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and a cash on delivery system. The new native press offers a wider medium of advertisement. The revolution of 1911 was a revolution not only in political thought, but also in the emancipation of Chinese ideas as regards fashion, customs and general mode of living. This has made itself felt already in a tentative adoption of Western products and methods and a demand for countless European articles, the sale of which would formerly have been impossible. It is the duty and privilege of the British Empire, whose trade with China-despite all the disadvantages I have enumerated- still predominates, to foster and stimulate this quickening of the Chinese economic life, and this, in my opinion, can only be done by the revision of existing methods of trading, with the great end in view of bringing the products of our industrial organisation within the reach of the Chinese consumer at the lowest possible price. Gentlemen, I firmly believe that permanent success in the future will lie in the development of direct distribution.

Here are four vital requirements, which face us in any consideration as to the expansion of our trade with China in the future, and to these I would draw your most earnest attention this afternoon. The first one is the absolute necessity for a closer co-operation between the manufacturer and merchant in this country, based on mutual recognition of each other's aims and sphere of activity, so that their efforts may be co-ordinated to the common end of securing the trade of the future. More should be done by our manufacturers in paying careful attention to the special requirements of the market as regards styles, qualities, designs, finish, make- up, and the 101 minute details which play such a large part in a developing market such as China. They should be prepared to work for the future, and not in every case to expect an immediate return on their capital outlay. They should take a closer interest in the special needs of the country, and render every possible assistance to the merchants in their efforts to develop the trade, as, for example, by more generous commissions, the taking of a share in the expense of costly organisation, the loaning of the services of

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